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As red-blooded Americans, we’re very familiar with what capitalism is all about. But what’s a rentist? Oh no biggie, just an entirely different way to think about your economic role in a market economy. A capitalist makes something and sells it for a profit. But a rentist earns a living by leasing access to a product or service over a long period of time.
Take magazines for example. The traditional capitalist publisher would pay writers, designers and printers to put a magazine together and ship it to newsstands. Then people would choose to own that magazine or not, and once they purchased it, it was theirs forever.
A step toward rentism is the (quite old) idea of selling magazine subscriptions. The user (reader) signs up to receive future products automatically (almost always at a discount) and the business (publisher) benefits by acquiring a steadier source of revenue.
Full-blown rentism happens when the publisher gives access to an even wider mix of products and services, but if you stop paying the subscription fee, you lose all the access. Many magazines do indeed offer such a model today. The reader is paying to have full access to a set of thoughts, opinions, experiences, etc. The publisher gets some benefits too of course. She can more easily make money off the magazine’s back catalog. But more importantly, she has better control over her product and the payments received for interacting with it.
Another obvious example is Netflix. You can bingewatch roughly a jillion hours of programming on there, as long as you’re paying your $9.99/month. Stop paying, and you’ll never find out how the latest season of Sharknado: Omaha ends.
How It Matters to Your Business
Is it time to sell everything and buy a boatload of Netflix and other rent-based businesses? We think not. There’s probably plenty of juice left in traditional models of capitalism. But it sure doesn’t hurt to think about how your business could thrive under a rentism model.
To take a super simple example in the cosmetic medicine sector, does it make sense to start offering a monthly beauty subscription for your med spa patients, giving them access to exclusive treatments or special packages each month at a set price? Or to go a lot further, maybe you’ve been thinking about developing a new medical product, which can be leased to medical providers across the country, and requires a steady stream of consumables to operate. In between these extremes are countless other ways to develop ongoing revenue streams.
How It Matters to Your Online Marketing
Let’s return to the magazine example to explain the different marketing messages as you transition from a capitalist to rentist business model.
- Retail – The marketing angle here is to entice the single purchase. That’s why magazine covers matter so much. Apply the same concepts to online marketing and you get SEO, attractive websites and PPC advertising. Sure, you’d like to develop a long-term relationship with every customer, but the ultimate marketing focus here is bringing in new sales, now.
- Subscription – The magazine pitch is simple: “buy a year and save 45% off the newsstand price!” This is generally a message that gets floated to a person who’s already expressed interest in the magazine (by buying it or at least reading it). Similarly, pitching subscriptions or packages to your current customers via email newsletters, social media shout outs and in-office promos is the way to go.
- Rentism – It’s a natural process to transition subscribers into renters. “You already love getting our magazine monthly, now you can access our full archive and get exclusive content by signing up to our channel!” So if you already have customers who are getting a recurring product or service from you, they’re the first line to consider when expanding. But beyond marketing automation and other relationship marketing tools, you can also consider pitching this offering to an audience outside your existing customer base. The core message is that you are now offering access to a curated, comprehensive product/service mix, which will be a tremendous value if the customer takes full advantage.
Rentism Wrap Up
If it’s not clear already, the goal of rentism is to maximize the lifetime value of a lead. It’s not about making one sale. It’s about fully integrating your product or service into the lives of your customers. In short, making what you offer indispensable, so that your customers see the value of paying for it, month in and month out.
Your existing customer base is more valuable than ever. Smart businesses will offer a mix of retail, subscription and rentist products and services so that they can meet customer needs and deliver the most value.
