The subscription landscape in 2023 is shaped by economic uncertainty and consumer cost-cutting. It is no surprise that subscription businesses are actively seeking growth opportunities and OPEX reductions to ride the storm, while also ensuring existing subscriber revenue is protected. New research from Minna Technologies in partnership with FT Strategies and Savanta in Subscription Economy: Business Barometer, with results of a survey of over 100 decision-makers from enterprise subscription businesses in the US and the UK, reveals a promising trend. Despite economic challenges, subscription businesses have reason to be quietly optimistic, noting moderate subscriber growth over the past 12 months. As growth plateaus, how can subscription businesses continue to innovate and thrive while adapting to ever-changing consumer behavior and external influences such as economic and regulatory challenges?
Exploiting a new channel to reach and engage subscribers
The report findings show that banking apps have rapidly become a critical channel for subscription management, with benefits too large to ignore. This empowers hundreds of millions of bank cardholders to centralize and manage their subscriptions while offering subscription businesses a new way to connect with millions of active – or sleeping – subscribers. As the number of subscriptions increases per household, the convenience of managing them all directly within their trusted banking app, likely already installed on their phone, is a highly attractive proposition. This not only benefits subscription businesses seeking to reach and engage an enormous audience, but it also unlocks increased convenience, control, and flexibility for customers, putting the customer first.
The commercial gains of increased subscriber convenience, control, and flexibility
Convenience: seamless omnichannel subscriber experiences
A multi-channel strategy is essential for growing lifetime value, giving subscribers more ways to engage with their subscriptions. Today’s subscribers are in touch with the latest technology and have come to expect self-serve subscription management and levels of automation through various emerging channels, including banking apps, games consoles, and automotive infotainment.
What the data says: Our research indicates that 46% of subscription businesses have identified banking apps as a key channel to reach and engage subscribers over the next 12 months, while one in two consumers aged 18 to 44 – and one in three consumers across all age groups – would consider switching bank accounts to gain access to in-app subscription management.
Control: empowering subscribers to drive satisfaction
Empowering subscribers to manage their subscriptions autonomously is a win-win. Providing a comprehensive, mirrored self-service experience across various channels satisfies the desire for control and reduces friction, while at the same time minimizes disputes, chargebacks, and support overheads for subscription businesses.
What the data says: Despite financial pressures on households, many consumers return to paid subscriptions shortly after canceling, known as “churn and return”. Six in ten (60%) subscription businesses report that up to a fifth of their users cancel and then resubscribe within six months, as consumers demand more control over when and how they subscribe.
Flexibility: boosting subscriber retention and LTV
Subscription flexibility is critical in offering alternative options to subscription cancellations, such as upgrading, changing plans or accessing discounts, and is essential across all channels to retain customers who may otherwise consider discontinuing their subscriptions.
What the data says: Our data shows that upgrading is the most common type of subscription change, with an average monthly change rate of 25%, despite economic volatility. Additionally, 86% of consumers would consider accepting an offer instead of canceling, and 72% would prefer to pause their subscription rather than cancel.
Empowering subscribers is also critical for looming regulations
The emphasis on providing increased convenience, control, and flexibility for subscribers also aligns with looming “click-to-cancel” provisions. These provisions are gaining global momentum, notably in the US, the UK, and France, forcing subscription businesses to simplify the cancellation processes and enable consumers to cancel services in the same way they signed up for them.
While regulatory changes are always going to be a fact of life for subscription businesses, they shouldn’t necessarily fear them. Aftenposten, one of Norway’s largest newspapers, recently revealed it had simplified its off-boarding journeys and by doing so, had convinced more subscribers to stay by making it easier to leave. This counterintuitive stroke of genius places the consumer at the heart of their paid content strategy.
In summary: harnessing strategic gateways to engage with subscribers
As consumers embrace new channels, such as their banking app for subscription management, businesses have a unique opportunity to engage and retain their subscribers through new avenues. The banking channel is a strategic gateway for businesses, similar to that of app stores, offering a path to consumer empowerment, growth, and retention in the ever-evolving subscription landscape. By harnessing the potential of banking apps, companies can tap into a wealth of opportunities and foster mutually beneficial relationships with subscribers, delivering long-term value for both parties.
Download your free copy of Minna’s exclusive report, Subscription Economy: Business Barometer, to explore performance benchmarking data, insights, and trends from a survey with over 100 US and UK subscription business executives, and exclusive analysis from Minna, FT Strategies, Savanta and more.
To learn more about how subscription businesses can embrace the banking channel to reach, engage and retain subscribers, visit minna.tech.
About Minna Technologies:
Minna Technologies is the global market leader for subscription management embedded in banking and fintech apps. We partner with top-tier banks, fintechs, and subscription businesses to grow revenue, reduce operational costs, and drive engagement, retention, and lifetime value for over 50 million users. Find out more at minna.tech