Executive Summary
Situation: Subscription models are widely favored across various age groups, but they have a particularly strong resonance among Gen Z and Millennials (92% of Millennials engage with at least one subscription service). Despite worries about "subscription fatigue," projections suggest that by 2025, the subscription economy will surge to $1.5 trillion, up from $650 billion in 2020.
Risk / Reward: Challenger banks and fintech companies are at the forefront of adopting subscription models and credit unions face a pivotal choice: invest the effort required to thrive in the subscription trend or risk falling behind.
Adopting a subscription model that bundles various products, services, and exclusive benefits into one monthly fee could redefine the concept of credit union membership. This approach not only enhances the perceived value of joining a credit union but also opens up new avenues for generating non-interest revenue.
Hypothesis: Do current and prospective members want subscription models? Could it increase engagement? How likely are consumers to switch to institutions that offer such models? What would they be willing to pay?
To seek answers to these questions, this test involved member discovery focus groups, staff interviews, and the collection of qualitative feedback to assess the desirability of subscription-based pricing models.
Credit Union Implications
Themed subscription packages, closely tailored to meet member preferences, show immense potential. Allowing members to customize their packages from a selection of tailored products and services resonated well, further enhancing engagement and satisfaction.
Download the full Subscription-Based Pricing Models test report to learn about the eight subscription bundle themes that emerged from an analysis of the test results.
Next Steps
Building on the insights gained during the initial year of exploration, The Lab at Filene, alongside its key partners, will advance the development and assessment of prototype subscription-based pricing models. This next phase will also involve collecting additional in-market data to thoroughly evaluate the feasibility and scalability of these models.
