You know what I noticed recently? I mean, I’ve noticed it before but I rrrrreeeaaallllyyyy noticed it recently. Literally everything is a shifty, shifty subscription. And the worst of them are all products/services that are low cost, high-margin for the operator (looking at you car washes….) wherein they can squeeze lifetime value and cement margin in one swoop. They’re moderately deceptive in so far as they give the appearance of costing less per unit for the consumer but require a level of commitment/use to achieve that, which is prohibitive for most users. What’s the 21st-century version of snake oil? Most SaaS products…..and car washes.*
Let’s see a hypothetical example for an operator near me.
You know what an average car wash costs the operator? ~$0.23 per car. Labor, facilities, and materials are all included in that figure. Caveat being that that figure obviously varies based on, well, variables. The average addressable consumer for these facilities washes a car just over one time per month. A one-time wash is usually no more than ~$20. Subscription for a similar “level” of wash is ~$35/month.
If you’re an average user, you’re paying an extra $15 for that one wash, and all for the privilege of being able to hold the illusion of washing as often as you want. But it’s not even about the delta on that one wash. It’s about the fact that you’re now locked in. If you pay by the wash sans subscription, you’ll likely use whatever is convenient when the need arises, and you’ll be low(er) CLV (customer lifetime value) for the hypothetical operator above. If you subscribe, they may sacrifice a little margin on the wash, but your CLV skyrockets as you are now limited to that operator unless you want to pay for the same service outside of your subscription (and who would?).
Don’t get me wrong, I have a car wash subscription that I use ~2x a week. But at what cost do I get “value” out of it? In my case, very little. It’s close to my house and frequent destinations and in all fairness, I’m likely an edge case. But maybe that’s the point? It’s all about balance. Portfolio and cashflow balance for the operator. Time, effort, and commitment to receive the “value” for the consumer.
What does any of this have to do with business aviation?
When discussing any of our program offerings, I get asked frequently what questions aren’t being asked. There are two big ones I see overlooked often, one being mentioned above:
- What problem am I (really) trying to solve?
- At what cost?
There are obviously a myriad of other considerations in arriving at what the right program (or business aviation in general) is for an individual. An operator can only help answer those questions. A good operator will answer any questions you ask in pursuit of those answers. A great operator is a sherpa of sorts, guiding you through those questions and telling you to ask them in the first place.
Moral of the story? If it sounds too good to be true or you can’t figure out how the other party (operator) gets value out of the relationship, it’s ok to pause and dig a little deeper. If you’re looking at business aviation solutions and find yourself pausing, let me know. I’ve got a shovel you can borrow 😉.
*as a Bill Watterson-esque aside, I giggled when I wrote this.
-Mark
P.S. We did some things to our app. Go look.