The determination of property owners to maintain vast, beautifully manicured lawns has caught my eye.
The great number of trailers hauling lawn mowers on the roads makes it clear that outsourced lawn care is a significant business. But what motivates property owners when they contract a lawn-care provider?
There are two ways to see it: as a need for lawn mowing or as a desire for a beautiful lawn. Those who prefer the latter understand a lot about the subscription economy. Let me tell you how, and explain a bit about the subscription business model in the process.
Business-model innovation is one of the major drivers for entrepreneurial students at Shippensburg University and other schools across the country. The subscription economy is an up-and-coming business model that is complementing and replacing the sharing-economy business model — the domain of things like Uber and Airbnb.
Attitudinal change is under way. Younger generations, especially, find owning things troublesome and would rather subscribe to what they want.
Examples of successful implementation of subscription business models are ubiquitous. There’s the shift from owning music to subscribing to streaming services, or from buying a version of software to subscribing to constantly updated software, or from buying consumables at the supermarket to subscribing to a delivery service that brings them to your door. In classes at Shippensburg, about half of the students’ startup ideas include a subscription-based component, and I am enthusiastically encouraging them to explore it.
The subscription-economy model has two sides. From a customer point of view, a subscription often represents a smaller commitment, more up-to-date items and better control than a one-time purchase.
From the supplier point of view, the model shifts the focus from transaction to relationship, just as earlier development shifted attention from product to customer. This is creating vast opportunities to observe detailed data related to customer interests and habits, and market development.
It also has allowed analysis to move from counting the number of users to much more nuanced analytics. For example, algorithms use data to suggest the next piece of entertainment for streaming-service customers with such accuracy that recommendations have become an essential part of the overall experience.
Therefore, analytical skills are of central importance to today’s business, and students with the ability to squeeze out insights from codified data are in high demand.
Subscription-model based business is a fast-growing business category, and it doesn’t appear that the trend will reach its culmination for a while. There are many areas where successfully implementing a subscription model has yet to be found.
Among them, we will likely see landscaping contractors. They’ll transform lawn mowing into relationship-based, data-driven subscriptions. In such a case, they’ll learn what you want done to your lawn based on their relationship with you, on historical data and on what other people like you have done in the past.
Once the format gets to where you are enjoying your lawn more than before, and your experience keeps improving over time, you will be providing a long-term predictable payment stream for the contractor.
Otso Massala is an associate professor and director of the Charles H. Diller Jr. Center for Entrepreneurial Leadership and Innovation in the John L. Grove College of Business at Shippensburg University in Shippensburg, Pa. Email him at OAMassala@ship.edu.