The Unified Subscription Adoption Model and its 13 attributes that separate the winners from the losers in the subscription economy


Share on LinkedIn

Consumers and providers view subscriptions as a win-win business model. Consumers are offered flexibility, convenience, and affordability. Providers benefit from predictable revenue streams, higher retention rates, and deeper consumer insights. As of 2021, it is safe to say that the servitization of products and the corresponding shift from consumer ownership to access are irreversible trends. According to Zuora’s End of Ownership report, nine out of ten consumers will be subscribing to a service by 2022 while McKinsey’s Global Banking and Finance Review reports that seven in ten business leaders currently view subscriptions as their key business prospect.

However, not everything paints a rosy picture. Competition among subscription businesses is intensifying. No longer is Netflix competing with an out-of-touch Blockbuster for market share. Instead, Netflix is competing neck-to-neck with equally attractive offerings from Amazon, HBO, Hulu, Disney, Tubi, Peacock, and a dozen more movie streaming services. Parallels can be drawn in many more verticals. Subscription boxes, food delivery, car sharing, publishing, in-home fitness, software, music, and gaming are just a few examples of industries where launching a subscription service does not in itself guarantee success by any stretch of the imagination.

Acquiring and retaining subscribers in a market where incumbents and new entrants are rapidly jumping on the subscription bandwagon is only getting harder. McKinsey’s latest research on the state of the e-commerce subscription market shows that, as consumers go through the traditional funnel of awareness, consideration and purchase, businesses can hope for, at best, acquiring 13% and retaining 8% of their target market segments. In other words, by the time all is said and done, nearly nine out of ten consumers who heard about your subscription service never actually gave it a chance.

In such a highly competitive business environment, setting the “right” price is critical to success, but not sufficient. As we will see, price is just one among a dozen determinants of subscription adoption and subscriber retention, and often not the most important. As a result, pricing optimization (via conjoint analysis or other techniques) can take you only so far. Ultimately, your success depends on holistically understanding what drives behavioral intention and subsequent adoption, and designing services accordingly.


The Unified Subscription Adoption Model (USAM) is the first hybrid framework for assessing the end-to-end potential of subscription offerings. As Figure A shows, USAM combines two widely recognized technology and product adoption models after slightly adjusting their core attributes to better match the idiocracies of subscription-based offerings.

The Unified Subscription Adoption Model (USAM)

Subscription strategy and execution teams can confidently use this model to:

– Assess the potential and prioritize the launch of different subscription offerings
– Inform subscriber acquisition, engagement, servicing and retention strategies and tactics
– Increase the return on R&D investments by focusing on value-add improvements
– Inform subscription pricing, packaging and bundling strategies
– Optimize subscription positioning and marketing campaigns

Let’s take a deeper look at the two contributing models: the Unified Theory of Acceptance and Technology Use model (UTATU2) and the Service Quality Attribute Model (SQAM).

Unified Theory of Acceptance and Technology Use model (UTATU2)

The enhanced version of the Unified Theory of Acceptance and Technology Use model (UTATU2), was developed back in 2003 by a group of academic researchers who consolidated and built upon eight widely-used preceding models including the Technology Acceptance Model (TAM) and the Theory of Planned Behavior (TPB). Since then, the model has been applied successfully in dozens of B2C and B2B verticals including, among others, food delivery services, e-learning, tele-healthcare, mobile banking, e-commerce, assisted living, manufacturing automation (smart factories), and cryptocurrencies. The model points to the following seven determinants of consumers’ behavioral intention that, in our case, translates to consumers’ likelihood to subscribe:

– Performance Expectancy (“Can it deliver value?”): The expected measure of a service to provide practical value to the user. This is proven to be one of the most accurate predictors of intention to subscribe. Ultimately, it comes down to whether or not a subscription service is perceived as useful and/or helpful by consumers. If a service does not perform well in this category, the provider is looking at an uphill battle to acquire subscribers, let alone retain them. A fun, easy to use and affordable service cannot compensate for low usefulness.
– Effort Expectancy (“Can the user use it effortlessly?”): The expected measure of effort required by the user to use the service. In service design, the Level of Effort (LoE) is defined as the combination of the required skill and time put forth by customers, or in our case subscribers, to complete key tasks associated with a service. The latest research suggests high effort levels hurt customer satisfaction and undermine growth by depressing repeat purchases. Since one of the unique characteristics of subscriptions is the “trial” period where subscribers get to explore the service before they actually commit to it in monetary terms, any notion that the subscription service requires a lot of effort will lower consumers’ likelihood to subscribe.
– Social Influence (“Is the user’s decision influenced by others?”): The measure of a user’s influence by other people’s beliefs (e.g. peers, friends, family). Social influence is generally defined as the extent to which consumers perceive that “important others”, or people in the social networks, believe that they should use a particular service. However, this attribute is not a simple and unified concept. The prevailing idea is that social influence includes three primary processes: a) conformity (the act of matching attitudes, beliefs, and behaviors to group norms, politics or being like-minded), b) internalization (the nonconscious mental process by which the characteristics, beliefs, feelings, or attitudes of other individuals or groups are assimilated into the self and adopted as one’s own), and c) identification (the act of being influenced by someone who is liked and respected, such as a famous celebrity).
– Price Value (“Is it worth the fees?”): The measure of cognitive trade-off between the perceived benefits and the monetary cost for using them. Simply, the idea is that a consumer’s positive perception about a service’s benefits influences his or her intention to bear the subscription cost of that service. The flexibility subscriptions provide to consumers, versus traditional product-based business models, can be seen as an advantage. Through different pricing schemas and bundling strategies, subscriptions can appeal to consumer segments that assign different cost-benefit relationships to essentially the same core service.
– Hedonic Motivation (“Is it fun to use?”): The expected measure of associated fun or pleasure experienced in using a service. The root word “hedonic” comes from the Greek word for “sweet”, which means relating to or characterized by pleasure. Although hedonic motivation incorporates the pursuit of pleasure as well as the avoidance of painful situations, the concept has been traditionally linked to the positive connotation of pleasure. There are several theories that exert characteristics of Hedonic motivation and behavior but when it comes to subscriptions, affect-rich and affect-poor items help determine how the consumer views and desires different services. Affect-rich items are those that can produce associative imagery in the mind of the consumer, portraying it in a pleasing light and making it desirable. This strategy plays with positive hedonic motivation, convincing the consumer to subscribe to the service because they will enjoy using it. Affect-poor items do not offer that kind of imagery and are therefore connected with utilitarian purposes.
– Habit (“Can it be routinely used?”): The measure of how deeply a service can be incorporated in a user’s daily routine. After an extended period of time, ‘‘continuously using a service becomes habitual, which means that well-learned action sequences may be activated by environmental cues and then repeated without conscious intention.” Prior research has shown habit to be an important factor in predicting behavioral intention towards purchases, but what about subscriptions? Free trials represent a unique opportunity for businesses to turn a service into a habit, making it harder for consumers to live without it.
Facilitating Conditions (“Are usage instructions sufficient?”): The measure of sufficiency of resources and support for individuals to use the service. Software is a good example to help us understand facilitating conditions. Lack of availability of assistance, no timely support, incomplete information, and limited resources can lower consumers’ likelihood to subscribe to even the most innovative or useful software package. When planning to introduce a new subscription service, businesses must make sure they provide sufficient support.

Service Quality Attribute Model (SQAM)

While the UTAUT2 model performs exceptionally well when it comes to identifying and defining determinants of behavioral intention, it leaves something to be desired in regards to actual usage and subsequent retention (or subscription continuation). To fill this gap, we incorporated the Service Quality Attribute Model (SQAM). Originally inspired by Maslov’s hierarchy of needs and widely used for optimizing online user experiences, the model defines the following six attributes as key influencers of actual usage of a service:

– Functionality (“Does it work?”): The measure of a service’s ability to complete the task it was designed to complete. This is very similar to “performance expectancy” with the difference being that the former refers to an anticipated measure while the latter refers to a realized measure (post subscription). Subscription businesses need to be honest and transparent up front in terms of setting performance expectations since free trials can expose the truth behind any marketing gimmicks. You can run but you can’t hide.
– Reliability (“Does it consistently work?”): The measure of consistency of the performance of a service. This attribute goes hand-in-hand with functionality but focuses on the ability of the service to deliver the same value over and over. It is important to note that research published in Motivation and Emotion Journal points out that consistently delivering positive experiences beats “delightful one-offs” since feelings of surprise and enthusiasm quickly fade but sadness and disappointment stays with consumers for much longer periods of time.
– Usefulness (“Does it solve real problems?”): The measure of a service to provide practical value to the user. Once again, the construct appears to be very similar to functionality and performance expectancy but, in this case, the focus is on whether or not it serves utilitarian purposes or just delivers “fun.” Another way to view this attribute is by thinking of the difference between basic and luxury goods. Do I really need this service or is it more of a “nice to have?”
– Usability (“Can the user easily use it?”): The measure of how easy to use and learnable a service is for a user to complete a goal. Similarly to “effort expectancy” usability focuses on the learning curve subscribers are required to go through to get familiar with the service. Again, the availability of free subscription trials can expose any usability-related shortcomings ultimately hurting adoption.
– Efficiency (“Can the user use it quickly?”): The measure of how quick and with the least amount of effort the user can use the service. Effort is, once again, the focal point of this attribute but with more emphasis on speed, or the actual length of the learning curve. A consumer can quickly learn how a car’s navigation system works but can the same be said about semi-autonomous driving features?
– Desirability (“Does it make the user care?”): The measure of positive emotions, such as desire and pleasure, that a product brings to the user. Similarly to “hedonic motivation” this attribute focuses on whether or not a service is enjoyable to use. Hedonic motivation is based on expectations while desirability is based on actual experiences. Again, expectations need to be clear and accurate from the beginning since free trials can expose the truth.

By combining UTATU2 and SQAM, USAM becomes the first unified adoption model focusing exclusively on subscriptions, and able to inform strategic prioritization of candidate subscription offerings, acquisition-to-renewal subscriber strategies, as well as pricing, packaging and bundling optimization strategies. Having said that, constructing the model is the easier part of the job. The harder part starts with companies incorporating USAM in their strategic planning. Since data is the backbone of the model, setting up the infrastructure to collect, analyze and operationalize behavioral intention and adoption insights is imperative to successfully deploying USAM and, by implication, the success of any subscription businesses.

Stamos Kanellakis
I assist companies and countries in transforming their operating models to increase economic sustainability, equity, transparency, and efficiency.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here