Business models change over time, and so does the innovation behind them. In the 18th Century, America was largely an agrarian society, when the majority of the population lived or worked on farms. In the 19th Century, the Industrial Revolution took hold with marvelous inventions that propelled society forward in new and amazing ways, including factories that produced all kinds of fantastic products designed to make life easier for the common man.
The telegraph and then the telephone sped up communication from the days of the Pony Express. Electricity and indoor plumbing in the early 20th century brought light, heat, and convenience into homes and businesses. Automobiles replaced the horse and buggy. With the invention of the radio and television, news and entertainment leaped forward bringing communication about events to a more realistic, real-time basis. The nuclear age was born with the advent of the nuclear bomb in the 1940s.
In the second half of the 20th Century, rocket science enabled man to travel to the Moon and return safely to earth, heralding the age of space travel as more than just science fiction. Computers, once as large as the size of a large room, were invented that sped up the ability to make mathematical calculations faster and faster, and eventually became with the invention of the microchip, small enough to be held in the palm of your hand. Wireless communication then allowed people to talk and send messages around the world in an instant, once thought impossible, with the worldwide web connectivity called the internet.
Where would the world be without innovation, or without those who pushed the envelope to invent products and services that had never been imagined, or at the very least thought impractical and impossible. Inventors such as Thomas Edison failed 10,000 times before finally finding the solution for the electric light bulb, yet once he succeeded his invention changed history.
More modern innovations in the last two decades have created new ways to do business that make every day consumer’s lives so much easier. Consider online shopping and delivery of merchandise through companies like Amazon. When Jeff Bezos started his fledging company out of his garage, he was likely hoping it would be profitable at some point. Did he realize in those early days that his company would be the economic behemoth it is today?
Maybe not, but his goal back in 1995 was to create a company that would turn the world of online shopping upside down. Amazon is constantly on the leading edge of innovation when it comes to making consumer shopping and membership (Amazon Prime) better. His company generated over $280 Billion in 2019 Revenue and holds the title as the world’s largest online retailer. Bezos is quoted as saying: “We innovate by starting with the customer and working backwards. That becomes the touchstone for how we invent.”
Companies such as Netflix, Disney Plus, Spotify and Hulu have also engaged consumers with new innovative ways to watch and listen to media, and they have evolved into the model of streaming video and audio through the internet. Smart TVs and Smartphones are just a touch away from bringing consumers entertainment that is available with a subscription to their services, and easy to deliver to the end-user.
Companies using innovative ways to deliver goods and services to consumers, and engage them with an inexpensive monetization of membership, are driving commerce to new heights of profitability and loyalty. In the U.S., forty percent of online retail revenue comes from returning or repeat purchases, meaning that successful subscription business models with loyal users can be a successful revenue source for businesses that are able to effectively drive renewals. Retailers such as Dollar Shave Club and Blue Apron, primarily consumables that are received on a regular schedule, are some of the most popular subscriptions.
Healthcare has finally embraced the subscription model for patients as a way to be innovative in both medical and dental markets. For example, Telehealth has had a quantum leap forward in 2020 due to the COVID-19 pandemic. Large providers in this market, such as AmericanWell, TeleDoc, and MDLive are seeing record utilization from members.
As well, the dental business has had great success in offering consumers less expensive options than dental insurance for their oral health needs. Dental membership plans, administered by qualified licensed plan administrators on behalf of DSOs and dental practices for their patients, bring a level of innovation to consumers that many of them never considered – less expensive dental care at a deeply discounted rate allowing for repeat business as needed.
Both the patient and the provider benefit from the subscription model. Be innovative in your practice, and learn how to help your business and your patients. Turn them into members so they want to come back for their oral health needs. Innovate to grow.