Jonathan Hurvitz
Across industries, customer loyalty is on the decline. While the reasons for this range from price to poor customer service, to the fact that there are typically a multitude of similar options for consumers to choose from in the same category, it remains a concern for businesses. 

Generally, it is far easier and cheaper to retain a client than to acquire a new one. 

But is loyalty a dated concept, or something that businesses need to actively focus on nurturing among their client base?

Jonathan Hurvitz, CEO of Teljoy, has a different view. Speaking from his experience as the head of one of SA’s oldest subscription-based businesses, he believes subscription is the way of the now, and the future and that the subscription model is one that encourages loyalty by placing the needs of the customer first and foremost, while the business model behind it is designed around convenience, flexibility and adaptability – the very features that savvy 21st-century customers are looking for. 

Subscription-based businesses offer the use of their product or service to customers on a subscription basis, as opposed to a more traditional transaction where the customer purchases an item outright.

“It’s a model that has its roots in technology service provision, specifically software, where customers access a service on a “pay-as-you-live’’ basis,” Hurvitz explains “and it seems the pandemic, somewhat unsurprisingly, has had an important influence on the growth of the subscription economy”. 

Today this subscription economy extends far beyond technology services and includes products and services that address specific needs at the specific time the customer needs or wants them. 

The subscription model gives the customer the simplicity and flexibility of access to the product or service, enjoying the same benefits of ownership without a high initial cost or permanence that ownership entails.

Increasingly, the value once associated with ownership is changing – diminishing – as consumer behaviour shifts in favour of those goods and services that speak to more transient lifestyles in 2021. 

Forbes points out that Millennials in particular don’t want to own things because it ties them down. 

For retailers, this means redefining what customer loyalty is in the current age and responding accordingly. “It’s seeking to understand not just the evolution of retail, but the evolution of the customer, and using that as the foundation from which to over-deliver on customer expectations,” Hurvitz says. 

“This means having the operational capability to effect change rapidly, to adapt quickly, to reinvent constantly and to react to market trends swiftly.”

And yet, customer loyalty remains a challenge that doesn’t get easier to solve. In fact, an Anblicks article about the importance of user experience design in e-commerce says: “Research indicates that increasing competition and multiple choices make customer loyalty an impossible phenomenon.”   

 “At the end of the day it starts with acknowledging that while loyalty may be elusive, putting the needs and preferences of the customer first is paramount,” Hurvitz explains.

“Subscription-based enterprises understand that it’s not necessarily about the product, but about customer lifetime value.”

While the subscription economy offers the consumer the flexibility to choose access when, where and how they want it, with the freedom to cancel at any time, successful subscription businesses know how to provide the kind of value that encourages the customer to keep subscribing. 

“That’s where you find the loyalty,” Hurvitz says.