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The price of personalisation | ING Think

Personalised recommendations offered by subscription services are a tool to keep people coming back for more, but the price attached isn’t simply a recurring fee. It’s a handover of data, and attachment issues

Subscription-based services have grown in popularity, as much as 100% between 2012 and 2017, according to a 2018 McKinsey survey. Regardless of whether the subscription offering is for digital music, curated snack boxes, or hand-picked date night experiences, the rapid expansion of these services centres on delivering a uniform product to each customer that personalises itself over time based on data provided or collected.

In the same survey by McKinsey, 28% of US consumers reported the main reason they stick to their current subscription(s) is the level of personalisation offered. Personalisation, however, is not accomplished overnight. The longer you interact with a company, the more data is collected and the more personalised the experience becomes.

This means two things: first, the amount of data collected could be cause for concern when it comes to data privacy. One study found that 75% of UK citizens still report a concern with levels of online privacy, citing transparency as key for trust.

Second, consumers’ behaviour could be influenced by prolonged use of subscription services and their level of personalisation. Both can create an emotional attachment to the service and inflate the sense of switching costs and impression of ownership. This can increase the cognitive load required when deciding whether or not to cancel a subscription, often leading to procrastination and inertia.

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The price of personalisation | Article | ING Think.

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