The choice of subscription

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From TV services to meal boxes, gym memberships to pet products – paying a monthly subscription has become an established business model across multiple sectors. This form of commerce has grown by more than 100% every year for the past five years and generates revenues of more than $2.6bn annually, according to McKinsey.

But despite the rapid growth and expansion of subscriptions, consumer psychology has not necessarily kept up in terms of understanding the distinct motivations for this type of consumption.

With regular payments set up, there is a disconnect between receiving the product or service and parting with one’s money. As a result, payments often continue beyond the item being used – think of all those gym membership direct debits that continue to be processed without so much as a weight being lifted or length swum.

But it was more than just failing to cancel a membership that drew Jennifer Savary, assistant professor of marketing at the University of Arizona, to this area of research. Already interested in consumer choice, Savary wanted to investigate subscriptions in relation to how people see and identify themselves.

“It was part of my dissertation when I was at Yale and I was a broke graduate student. I had a couple of children and I wasn’t going to the gym so often, but I couldn’t stop paying the membership – I wondered if I couldn’t let go of the prior phase of my life when I was an athlete,” says Savary.

Her research explored whether people continue to spend on subscriptions for things that fit with a certain idea of themselves, even when it’s no longer an integral part of who they are.

In psychological terms, looking at whether to quit an ongoing subscription can “threaten the stability of the self-concept by signalling a change in identity”. Consumers who are uncertain about their self-concept – and therefore have low self-concept clarity (SCC) – are more likely to keep unused subscriptions than those who are more certain.

Self-concept clarity is a measure of the extent to which people know who they are, do not have beliefs that conflict with each other, and have viewpoints that are consistent over time.

While self-esteem is an overall evaluation of the self as good or bad, self-concept clarity is the way people’s knowledge about themselves is cognitively organised. 

If an identity we desire is related to a subscription, quitting it can signal a change in identity, which can threaten the stability of the self-concept.

This isn’t necessarily conscious, says Savary. “I don’t think people are saying, ‘I don’t want to give up my gym identity’ – it took me two years of thinking to figure out that, but people have a reaction to the idea of giving up something, and it’s more pronounced when it involves also giving up a treasured goal or value, or some part of how I see myself,” she says.

Similarly, signing up to a new subscription may indicate a new aspect of oneself, that also revolves around a change in identity.

Savary also considered self-signalling theory in this context. Consumer choice often involves signalling, for instance buying a certain brand to signal what type of person you are.

“I was interested in the idea that there’s another audience for those choices, and that is ourselves. If we have that uncertainty about who we are, then sometimes we use our choices to convey that information,” she explains.

Savary tested her hypothesis with several studies and experiments. The first looked at the relationship between SCC and subscription retention in a natural setting. The researchers conducted a survey among 1,150 people to report the unused subscriptions they currently had and measured their SCC on the scale developed by Campbell et al ( 1996 ).

The subscriptions used were selected based on pre-tests – 600 participants were asked for examples of paid subs, memberships, or apps that they had but didn’t use ( 93% of them could do this). Commonly mentioned ones were newspaper and magazine subs, club memberships and digital media services.

A different group of 400 rated the identity-relevance of a subset of 15 of the most common subscriptions. Scale items were: ‘this product tells me something about the user’, ‘this product communicates certain symbols about the person who uses it’ and ‘this product doesn’t say much about the user’. They were scored one to five from ‘strongly disagree’ to ‘strongly agree’.

The five highest-rated subscriptions were designated ‘identity relevant’ and the five lowest were designated ‘neutral’.

After the pre-test, the main survey was split into two. First, respondents picked from the list generated in pre-tests that they had but didn’t use. They could check as many as they wanted. Second, they completed the 12-item SCC scale. Choices included ‘in general, I have a clear sense of who I am and what I am’ and ‘my beliefs about myself seem to change very frequently’. Finally, they filled out demographic information including mood, age, gender and a single-item self-esteem measure.

A second study involved 186 participants from business schools writing an essay about three aspects of their lives that made them feel uncertain – this has been shown to affect SCC temporarily.

Once the SCC had been manipulated, the participants were asked to choose whether to retain or cancel services and subscriptions that they didn’t use much. The expectation was that low SCC would motivate people to retain unused identity-relevant subscriptions.

In total, Savary’s research consisted of six studies and all pointed to people with low SCC being more likely to retain identity-relevant subscriptions compared with those with high SCC.

“At this point, what’s emerging is that it’s not the whole story. If you were a practitioner looking at subscription ownership, having high self-esteem subscribers only gets you to a certain point. You also need to understand the differences between people, or those with high self-esteem but lower SCC – maybe these are people striving to have clarity on their self-esteem – those people might be the perfect target for you.”

Reference:

The Uncertain Self: how self-concept structure affects subscription choice, Jennifer Savary and Ravi Dhar, Journal of Consumer Research