West Monroe, a national business and technology consulting firm, today released a poll, “The State of Subscription Services Spending.” The results show that consumers are continuing to spend more on subscription services in an increasingly digital economy. While consumers are less aware of their total monthly expenses on subscriptions compared to three years ago, certain services—including those that gained prominence during the pandemic—are very top-of-mind for buyers.
The poll, based on a survey of 2,500 U.S. consumers in June 2021, is a follow-up to the firm’s 2018 published poll, “America’s relationship with subscription services.” Respondents were asked to tally up their monthly spend on subscription services across 21 categories, how satisfied they are with the services in each category, and how “aware” they are of their subscription expenses.
The results: On average, consumers are spending $273 a month on subscription services, up from $237 in 2018. Despite the increase, consumers estimated they were spending less than in 2018 and 100% of respondents were unaware of their actual spend.
“It is evident that U.S. consumers are choosing to spend more on subscription services than in years past, but they aren’t truly grasping how much they are actually spending. This disconnect has only increased from our survey in 2018,” said Dhaval Moogimane, a partner in West Monroe’s high-tech & software practice who works with companies on their subscription services strategy.
Subscription services and brands have become even more sticky by prioritizing the customer experience that they appear to blend into consumer’s daily lives and may not even register as subscription expenses at all.
As companies seek to become more digital, many are developing recurring revenue models based on new apps and changing consumer preferences. Subscriptions for products and services that transcend digital and physical experiences are increasingly popular: Peloton’s subscriptions for its fitness equipment and programs grew from 543,000 in Q1 2020 to 1.2 million in Q1 2021, for example. The key for companies is keeping their customers “hooked” and “happy” with subscription services to maintain and grow revenue.
“The pandemic has changed how consumers are choosing to spend their time and money,” said Neil Jain, a partner in West Monroe’s high-tech & software practice.
We are seeing this especially with subscriptions and services that are adapting to the change in consumer preferences. The pandemic has highlighted that services like paid wellness and dating apps are gaining increased favorability compared to 2018.
West Monroe is a market-leading advisor for high-tech and software companies. As market demand and attractive economics continue to drive strong growth in SaaS subscription services, West Monroe continues to guide many leading companies through successful SaaS transformations. West Monroe previously published a poll on subscriptions in 2018, “America’s relationship with subscription services.”
West Monroe is a national consulting firm that was born in technology but built for business—partnering with companies in transformative industries to deliver real, measurable results. Technology is who we are, it is not something we bolted on overnight, and we believe it is one of the greatest enablers of business value. That’s why we work in diverse, multidisciplinary teams that blend industry expertise with deep operational and technology capabilities to create quantifiable, financial value for our clients. Our 1,600 employees based in eight offices across the United States also own 100% of our business, so when you partner with us you know we are committed—because your success is our success. Our undeniably different approach breeds undeniable results. Visit WestMonroe.com to learn more.
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