Retention Takes Center Stage in Recurly’s 2025 State of Subscriptions Report

Recurly’s latest data highlights a pivotal shift toward retention, with businesses leveraging personalization, flexibility, and loyalty incentives to sustain growth amid declining acquisition rates.

Retention is the word of the year for subscription businesses. According to Recurly’s 2025 State of Subscriptions report, released today, the subscription industry has entered a pivotal phase where retaining existing subscribers takes precedence over aggressive acquisition strategies. The report draws on data from 67 million unique subscribers and more than 2,200 merchants, providing a comprehensive snapshot of the trends shaping the subscription economy.

Among the headline findings, subscriber acquisition rates have dropped to 2.8% in 2024, a stark contrast to 4.1% in 2021. This decline underscores the growing challenge of reaching new audiences as the market matures. Yet, businesses are finding opportunities in retention-focused strategies, with many leveraging flexible payment options, personalized experiences, and loyalty incentives to stay competitive.

“Even as customer acquisition declines, retention is increasing—a clear sign that consumers want to find and stick with subscriptions that best fit their lives,” said Joe Rohrlich, CEO of Recurly. “The onus is on businesses to provide products and services that create best-in-class customer experiences.”

The report also reveals the evolving expectations of subscribers. Flexibility has become a non-negotiable, with 71% of merchants now offering both monthly and annual plans. The option to pause subscriptions is another emerging trend, with usage surging by 68% year-over-year and saving 51.7% of at-risk subscribers.

Fraud prevention and alternative payment methods are critical areas of focus. Fraudulent transactions increased by 29% in 2024, emphasizing the need for secure payment systems. Meanwhile, the adoption of alternative payment methods rose by 19%, aligning with consumer preferences and helping mitigate risk.

Key Insights from the Report:

  • Declining Acquisition Rates: Subscriber acquisition rates dropped to 2.8% in 2024, highlighting market saturation and the growing importance of cost-effective retention strategies.

  • Evolving Consumer Expectations: Flexibility is paramount, with 71% of merchants offering both monthly and annual plans, meeting diverse subscriber needs.

  • Rise in Subscription Pauses: Subscription pause usage surged by 68%, demonstrating its effectiveness as a retention tool. Businesses offering pause options saw 25% of subscribers pause rather than cancel.

  • Fraud and Payment Innovations: A 29% increase in fraudulent transactions underscores the need for secure payment options. Meanwhile, the adoption of alternative payment methods rose by 19%.

  • Cyclical Subscriptions: With 20% of acquisitions coming from returning subscribers, the industry sees evidence that cancellation isn’t always permanent. Businesses generated over $200M from subscribers who re-subscribed after pausing.

INSIDER TAKE

Recurly’s 2025 report clearly shows that the subscription landscape is maturing, with retention emerging as the central pillar of success. For businesses in the subscription economy, the path forward involves embracing flexibility, personalization, and loyalty-building strategies.

Retention-first models don’t just defend against churn; they create growth opportunities. The rise in subscription pauses, for example, shows how flexibility can sustain customer relationships and revenue. Additionally, the decline in free trial effectiveness signals the need to attract high-quality subscribers through value-driven offers rather than broad-based acquisition campaigns.

The industry’s ability to address challenges like fraud, payment failures, and evolving consumer expectations will determine its trajectory. To navigate these hurdles, leveraging tools like advanced analytics, AI-driven churn mitigation, and secure payment solutions will be key.

As the subscription economy enters its Retention Era, businesses must focus on building enduring subscriber relationships to remain competitive. 

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