Expert insights: Key formulas for subscription success
The subscription business model has grown tremendously over the past few years. It especially surged through the pandemic as consumers looked for alternative ways to make purchases from the safety of home. Customers today are subscribing to more than just software and entertainment services. They are joining memberships for products across food and beverage, health and wellness, fashion and beauty, and many other less-traditional verticals.
In order to explore this emerging market, Bold hosted the Expert insights: Formulas for subscription success webinar, which featured Forrester Senior Analyst Lily Varon, and Robbie Kellman Baxter, business strategy consultant and best-selling author. The conversation was rounded out with Bold Co-Founder and in-house subscriptions specialist, Jay Myers, host of the Own Your Commerce podcast.
Key themes that emerged from the insightful conversation included the role memberships play in subscriber retention, how brands can scale by reducing subscriber churn, as well as strategies for reducing subscriber fatigue and preparing for future trends in this rapidly evolving industry.
Download our in-depth analysis of the conversation for your further consideration and review.
Let's continue the conversation around key formulas for subscription success, starting with memberships.
Build subscriber retention through customer loyalty
Getting customers to subscribe is a valuable first step, but retention is the true goal of successful subscription companies. How do you get customers to sign on for 6 months, a year, or even a lifetime, instead of churning out after the initial welcome offer or discount has expired?
The most successful subscription companies have found treating customers like valued members is paramount to optimizing customer lifetime value. Here are some tips for increasing subscriber loyalty:
- Provide genuine value beyond the product itself. This could include ongoing perks and discounts, exclusive benefits, or even tertiary goods and services that make the subscription too valuable to cancel.
- Invest in personalization. Personalization doesn’t only mean making product recommendations and giving customers the ability to customize their purchase. Invest in removing the friction from the shopping process, reducing the number of clicks and forms customers need to fill out, and adding flexible payment options.
- Create a sense of membership. Appeal to customers' emotions by connecting with them frequently and always being available for a customer service call or follow up. Provide spontaneous rewards, perks, gifts, and make them feel like they are part of an important membership.
Scale by reducing churn
Though some amount of churn is inevitable for subscription brands, there are strategies that can effectively reduce customer churn while increasing the number of longterm subscribers. One of these is to invest in a great onboarding experience.
What does customer onboarding mean for subscriptions? A strong onboarding starts with the first time a customer interacts with your brand, enters your site, or begins filling out a form to inform the type of subscription. The impression you make on a customer is the first step towards creating brand loyalty and reducing their likelihood of churning.
Take the friction out of the onboarding process by making sure it is enjoyable, inspiring, and reinforcing the value in their purchase decision. Customers will reward a good onboarding experience with increased customer lifetime value.
Check out our free and useful customer lifetime value calculator for subscriptions.
On a recent webinar Subscriptions 2021: The new pillar of ecommerce, Chris George, CEO and Chairman at SUBTA, spoke about the importance of having a strong onboarding — but also outboarding — process in place. This means tackling churn head on by finding out why customers are churning, and looking into if there are ways of winning them back, either through the right offer, discount, or adjustment to their plan.
By tackling churn head-on brands can effectively increase recurring revenue and scale with confidence.
Counter subscription fatigue
Subscription fatigue refers to when customers get tired, overwhelmed, or aren’t able to afford the number of different subscriptions they are signed up for. It is one of the primary reasons customer churn. Here are some common types of subscription fatigue and tips on how to counter them.
Their subscription lacks long-term appeal
The classic scenario where a customer signs up for a subscription only to realize after a month or two that they don’t want it anymore. Look for ways to add additional value to your subscription that make it hard to quit. It could be access to an exclusive community, a member-only deal of the month, or an ongoing discount for subscribers.
The subscription inspires guilt
Often subscribers love the product or service but don’t end up using it enough to justify the cost. This makes them feel like they are being wasteful. Make sure to engage with the subscriber frequently to remind them of the product service and the potential benefits of using it, as well as tips and tricks to get them excited about their purchase.
It’s too hard to cancel
Unfortunately even in this day and age there are still brands trying to fool customers into subscribing or trying to build retention by making it hard to find the cancel button. The only thing this will result in is an angry customer service call. Rather than making it hard to cancel, provide an easy and awesome outboarding experience and find out as much as you can about their reasons for cancelling. You may be able to win them back with a different offer or at a later time, providing they had a pleasant experience with your brand.
One final tip: look beyond the subscription product itself, and imagine what additional perks, features, and benefits could be added to transform your subscription into a valuable brand membership.
We hope you enjoyed these quick tips inspired by our Expert insights: Formulas for subscription success webinar, now on-demand.
For a more in-depth analysis of this insightful conversation, don't forget to download our takeaway report For subscription success, invest in loyalty.