How To NEVER Lose A Subscriber

Understand how to reimagine your relationship with subscribers to drive loyalty and grow revenue. This on-demand webinar focuses on teaching retention strategies that reduce

Today’s consumers focus on brand experiences – and controlling that experience – throughout the customer lifecycle.

Are you ready to reimagine your subscriber experience, determine what truly drives loyalty, and how to grow recurring revenue?

Join us as we look at proven methods that keep subscriptions growing on this on-demand webinar. With leading subscription marketing experts, Recurly’s CMO, Theresa McEndree, and Subscription Insider’s CEO, Kathy Greenler Sexton, you’ll lean into new retention strategies to never lose a subscriber, including:

  • Reducing churn
  • Introducing new pricing models
  • Upselling / cross-selling
  • Driving loyalty
  • And increasing subscriber lifetime value

On-Demand Playback

Presentation Slides (PDF)

Click here to download the slides.

About Our Experts

Theresa McEndree, CMO, Recurly

As the Chief Marketing Officer of Recurly, Theresa leads the go-to-market strategy for demand and revenue creation. A customer champion and passionate brand storyteller, Theresa guides her team in setting the stage for all things Recurly – who we are, why we win, and how we stay at the forefront of subscription management and billing innovation. She is the driving force behind a team of innovative designers, marketers, and brand advocates who are all on an endeavor to tell the story of Recurly’s grand vision.

After 20 years in payments, Theresa left Blackhawk Network to join Recurly in January 2022, bringing with her an unmatchable set of accomplishments, including an impressive number of awards for media and demand innovation. There, she led the global marketing team to achieve 3x their pipeline, owning the industry share of voice and launching new products for consumers and customers alike.

Theresa holds a degree in Psychology from Saint Joseph’s University in Philadelphia. She currently resides in Dallas, Texas, with her husband, daughter, and dog. When she’s not being Recurly’s fearless marketing maven, you can find her lounging at her hot pink beach bungalow or traveling, cooking, and crafting Play-Doh masterpieces.

About Kathy Greenler Sexton, CEO, Subscription Insider 

Kathy Greenler Sexton is the CEO of Subscription Insider and a recognized expert in subscription business models, market strategy, brand development, and information products. Subscription Insider is an information company focused on delivering news and insight for growing profitable subscription businesses. Learn more at www.subscriptioninsider.com and www.subscriptionshow.com 

Transcript

Kathy Greenler Sexton:

Welcome. My name’s Kathy Greenler Sexton, and we are here for a really interesting webinar today with Recurly’s Theresa McEndree, on How To Never Lose A Subscriber.

Theresa McEndree:

Great, thanks for having me. I’m super excited about today’s topic and helping all of the subscription companies out there retain as much as humanly possible.

Kathy Greenler Sexton:

What I want to do is to actually just give everybody a little bit of sense of why you bring so much expertise to the table, Theresa because how to never lose a subscriber is a big promise, but you have so much expertise that everybody can learn from today. Theresa is the Chief Marketing Officer for Recurly, and she leads the go-to market strategy and demand and revenue creation for the company. She spent 20 years in payments at Blackhawk Network and she joined Recurly in 2022 in January. She has many, many awards and recognition for her media and demand generation innovation. She’s led global teams, and she has 3X pipelines. She’s created industry share a voice. She’s launched new products for consumers and for B2B companies alike.

Kathy Greenler Sexton:

She really brings a lot to the table, and I want everybody, as we go through today’s session to not be shy, ask questions. We are going to be monitoring the chat and the QA. So please don’t be shy, let us know what your questions are. For all of you who may not know Subscription Insider, we are a media company and we focus on helping subscription executives learn how to grow profitably their businesses. We do this in a number of ways, and today’s webinar is one example of that. We have a couple of upcoming events. The first one is in two weeks, I’m actually leading a session on how to select the right subscription technology for your business. If you would like to learn more about that, go to subscriptioninsider.com/events, and you can read all about that.

Kathy Greenler Sexton:

I am very excited to share Subscription Show 2022. This year we will be in New York on November nine and 10, and we have an amazing lineup of speakers. My goal for all of you attending is you’re going to have actionable insight that you can take back to your companies on payments, on marketing, on retention, on strategy. There’s so many things coming at our businesses, it’s really important to gather and to talk and to really prepare for all the things that are impacting our businesses as we move into 2023. If you are interested, please check subscriptionshow.com. And at the end of the presentation we’ve got something special for you there as well. With that, I’m going to turn it over to Theresa, so we can learn how to never lose a subscriber.

Theresa McEndree:

Well, thank you, Kathy. Super excited to go to the event and attend the upcoming webinar too. What are we here to talk about today? We really want to look at both voluntary as well as involuntary churn and best practices that our business has accumulated over the last 12 plus years and hundreds of millions of subscribers on really how to optimize the subscriber experience, really amplify everything that you can do from retention, whether it’s upsell, cross-sell, pausing, and just some best practices that we’ve uncovered with some of our really amazing customers over the years. So without further ado, we’ll get to the problem statement on the next slide.

Theresa McEndree:

What is the real challenge? We’re going to look at some testing constructs and some best practices, and really we want to look at how we enable agility in market. Kathy went through a lot of stuff that I’ve done in my life, really at the heart of it it is, I love consumer behavior and I have been a student of that since I was able to be, and I’ve long studied the best ways that consumers engage in what their expectations are, and anybody that’s been in the market, whether you deep dive or just participate, you know consumer and subscriber expectations change at the speed of light. And it seems like it keeps accelerating. Really how do you move nimbly in the market? Whether it’s from bundles or promotions or new payment methods, new integration partners, the ecosystems keep expanding and do that in an agile way. Right?

Theresa McEndree:

It always seems like there’s another roadblock. As marketer we want to move quickly. Right? And how do you kind move nimbly through the world and test good constructs and apply best practices. We’re going to talk about the strategies and the technologies behind that today. We can move on to the next slide. Why are we here talking about it? Recurly has been in the subscription management and recurring billing space. Last year alone we supported 50 million active subscribers across our customer base. We do have about 2200 corporate customers. We love to help our partners grow faster, grow smarter and grow stronger. Right? so how do we move with insights and intelligence? How do we move nimbly and how do we do that at scale? That’s why we’re here today. And just some of the great brands that we work with and have learned in partnership with.

Theresa McEndree:

We are going to launch a few poll questions today. This is going to be our first one. As any good consumer deep dive we really want to look at some of the macroeconomic trends that are impacting consumers and subscribers at large. Our first poll question that Kathy’s going to help me in launching here is, what are the subscriber shifts that concern you most? We’ve got revenge spend out of home, how people are spending and where they’re spending is shifting as our behavior patterns evolve. Supply chain challenges, we still see doesn’t have anything to do with subscriptions, but my husband went to the Deli counter and they were out of Turkey and he was told they wouldn’t have anymore until October. So it’s like real and it’s hitting us in some strange spots.

Theresa McEndree:

Uncertain economic outlook. Jamie Diamonds, there’s a hurricane coming, we don’t know if it’s a small one or a huge one. Right? And every day the market’s fluctuating and inflation changes and unemployment, looks good and then it doesn’t. So really how is that impacting our world? It seems uncertain. Right? I think we’re all trying to figure out what that looks like. Inflationary pressures. Inflationary is at I think a 40 year high. How is that impacting your share of wallet and how people really think about your pricing and how you’re thinking about your pricing and promotional strategy? And global uncertainty. Right? There’s just a lot going on and how that impacts overall consumer confidence and the way that consumers engage with brands.

Kathy Greenler Sexton:

Well, I have to say everybody’s responding right now, and it’s very, very interesting that people are coalescing almost 60% on one particular answer. That’s very interesting. I’m going to give just a few more minutes to give everybody else a chance to see if the trend changes a little bit. And I’m going to close the poll.

Theresa McEndree:

I’m glad nobody has supply chain Turkey challenges that they’re concerned about. This is wonderful.

Kathy Greenler Sexton:

Let me give the response. Supply chain challenges, zero of you answer that. Global uncertainty, 0% answer that. Revenge spend and out of home, that was 9% of you. And inflationary pressures, 31% of you. And the winner by far, uncertain economic outlook, 59%.

Theresa McEndree:

Well, great. Thank you everyone for participating, some great and fast responses, not super surprising. We’ll move on to some data that we’ve pulled, some third party data, really looking at some of these macroeconomic trends. You all saw your peers responses on these topics. When you look at overall consumer behavior, 95% of consumers, not shockingly are impacted by inflation. Consumer shifts, we all ran towards eCommerce during pandemic lockdown. What we’re seeing is a reemergence of omnichannel, right? And it’s digitally initiated, might be digitally consummated, but there’s likely a retail visit, there’s social engagement. Right? And so consumers are really engaging across channels. We’re also seeing that impact the subscription business at large.

Theresa McEndree:

We’ll move on to our next slide. So just some baseline setting. I think we’ve got some new to subscriptions, some very mature in the market. Why do people sign up for subscriptions? Why do consumers love subscriptions? This is some great data from McKinsey. I trust that everyone can read, so I’m not going to read the entire slide, very nutritionally dense as we like to say here. But a lot of people really go after for some of the core principles. Good value for price is 62%. High quality, good variety of items or experience, the convenience of subscriptions overall. And there’s a lot of other attributes, right? Flexibility, service, and it’s really we’ll see in the next slide. It’s really creating a huge market opportunity for businesses.

Theresa McEndree:

So McKinsey looked at the other side of this. Sorry. I’m off my slides. Why are consumers spending their money? Right? They feel like it’s a great value. We ran some research earlier this year and US consumers actually feel more loyal to brands that they subscribe to, which is wonderful news for all of us. Right? So that recurring behavior, that subscription, I always like to say voting with your wallet. Right? It really actually translates to brand affinity and brand loyalty. They’re 51% more loyal to companies that they subscribe with and they actually tend to spend more money. While they feel that it’s a great deal and it’s driving value, they are also more inclined to spend money with subscription companies over the long run, which we all obviously love.

Theresa McEndree:

How do brands benefit from this? If you look at the next slide, subscription models, recurring growth are really a stall word of high growth. The rate that a subscription company grows versus non-subscription is 8X. So really great returns, you build deep consumer relationships, you drive recurring revenue, all of the wonderful things. So really establishing the framework of why. If you look at the next slide for McKinsey data, it’s creating 1.7 trillion to $3 trillion in market opportunity across industries. This direct to consumer subscription based model is really driving high returns for everybody in the market, board members, all that great stuff. And why are we gravitating towards it? Why do consumers love it?

Theresa McEndree:

This direct to consumer relationship, as marketers we love it. Right? We get data, we can cut out some intermediaries, we have really deep engagement with the consumer. And we can continue to evolve that relationship, right? And really deepen it both from a brand perspective and obviously a commercial perspective. We’ve seen huge growth across this channel. Consumers love it, especially over the last few years. People have really changed how they shop and what’s important. We’ve looked at a number of studies. You want to feel more connected to the brand, right? Whether it’s their community propositions, ESG, really understanding more about origins of product and having a direct connection to the brand or the manufacturer or the originator of the content, right? Really helps enable that.

Theresa McEndree:

We’ve got some really great macro trends that are continuing to bolster the overall subscription industry. We want to drive to the key takeaway. Right? Leading consumer brands are going to continue to grow exponentially. And now we’re going to get into the meat of the topic, which is, how do you keep those? Right? It’s great to acquire, we know that’s a hard fought battle. How do you retain them? And we all know the old adage, there’s been a number of ways to measure it, but it is way more efficient to keep a customer, right? Than it is to acquire a new one. We want to lead into some of those great best practices. First, we’re going to start with some data that we got from that study earlier this year. That 31% of us consumers plan to cancel one or more subscriptions this year, right?

Theresa McEndree:

Voluntary churn, intentional churn is always a concern. And this is at the forefront of consumer’s minds as they’re evaluating their overall financial position as consumer confidence becomes a little shakier day-by-day, it almost feels like. We wanted to launch another poll with you guys and understand from you, what do you feel like is the number one reason or what do you know to be the number one reason that subscribers are choosing to cancel for your particular business? We’ve got no longer of use, better competitor offering, price increases, subscriber experience.

Kathy Greenler Sexton:

Well, everybody’s submitting their responses now and they are coming in fast and furious.

Theresa McEndree:

[inaudible 00:14:47]. Go ahead, Kathy. Sorry.

Kathy Greenler Sexton:

I think we have most everybody coming in here, so I’m actually going to end the poll and give everybody the results. Here we go. The lowest in terms of percent, 5% is people canceled you thought because of a better competing offering. The next one up at 21% was because of price increase. 26% of you thought people canceled because of the subscriber experience. And the number one reason that all of you said that subscribers choose to cancel, at 47%, is no longer of use. There you go. What do you think? Does that line up Theresa with what you observe?

Theresa McEndree:

Well, it lines up with what we typically see when you ask a consumer versus a business. Right? A little bit of maybe disconnect between sentiment and reality, right? Which always manifests in any survey or any research. The top reasons that subscribers state that they would cancel, right? And this is a macro from some research that we did early this year. 71% said because of price increases. 67%, so close second, and this was the number one in our poll here, was no longer of use. And 44% said for better competitor offering. You really have the top three and it’s the inverse of why people subscribe. Right? And so you see some rationality there. And then if we move to the next slides, that’s really voluntary churn, right? Which is that’s me electing to opt out, to cancel my subscription.

Theresa McEndree:

The other side of the coin as we all know is involuntary churn. And so this is a failure of a payment or failure of an account mechanic, and somebody turns out and they didn’t want to. Involuntary churn can actually impact 7.2% of your subscribers or put them at risk every month. That’s a significant portion. And so we’re going to talk through some best practices for both voluntary churn management as well as involuntary churn management. Next we’re going to look at, what does it take to keep a good thing growing? We’ve all got great businesses that are continuing to grow and continuing to scale. So how do we move faster, smarter, and stronger? We’re going to walk through some of the core principles and best practices. Please feel free to pop questions in as we go through. Right? There’s a lot of concepts in here if we want any deeper detail as Kathy just said, I think we’re in sync, right?

Theresa McEndree:

Submit additional questions and we’ll do our best to get to them. Grow faster, 76% of consumers demand personalization. Right? When subscriptions really came on to the scene, it was great. It was a singular offering right? And maybe there were some pricing bundles and consumers all flock to them. As markets have become more competitive, right? This demand for personalization has increased, whether it is a product add on, whether it’s changing the curation of a box, whether it’s being ad supported or going to a premium bundle, we’re seeing a lot of different trends across everything from consumer goods to streaming, to publishing and all those really wonderful categories. What do we see? Consumers want personalized custom subscription plan in a few clicks.

Theresa McEndree:

As markets have matured the competition has increased, right? And what consumers typically do then is say, I want to be able to easily, right? Customize this experience for me. If I’m going to give you money on a regular basis, right? I really want it to be specific to how I want to consume, right? We know consumers have very high expectations when it comes to that. Businesses need to test and optimize quickly, right? For positive downstream revenue impact. We all know this. And it’s the ability to test whether it’s cohorts that come in from different marketing channels, whether it’s different plan subscribers, whether it’s divvied up by geography or a different cohort, it’s really important to intelligently test and optimize.

Theresa McEndree:

And then you can lower the cost of ownership. By simplifying your own personal tech stack, right? One of the things in a lot of the customers that have moved to Recurly that we see, is building this level of flexibility that consumers demand in today’s marketplace is really hard, right? It takes entire teams of dedicated engineers to move up with the agility. We’ve seen a lot of people who have reached a point of maturity and really want to simplify and lower their cost of ownership, because you need to be able to launch a free trial in a day, right? Or in hours and not a week. Right? you don’t want to sit in an engineering queue, that’s really no one’s favorite thing to do. It’s not mine. Really looking at some of the personalization, how do you test and how do you deliver this in a really nimble and streamlined way?

Theresa McEndree:

We want to go to the next slide please, Katie. Here’s some great examples in market. I personally love these. These are some of our customers and some of my favorite products. Building your box, right? There’s just wonderful industries with loop crates and beauty boxes and food delivery, and really personalizing it to your own needs, right? Whether you’ve got curly hair, whether you’ve got fine hair like I do, whether FabFitFun, you want to add some products. They’ve always got a really fun selection and curation that you can of customize the box on an ad delivered basis. When you think about some of our other customers, we’ve got like BarkBox and it’s really customizing it to the pet type and size. My dog will tear apart anything that’s fluffy, so it’s leaning into different types of products.

Theresa McEndree:

The ability to provide the customization that subscriber experience and personalization is just so wonderful, but to do it in a very simplified and well articulated way is hard. Right? It’s really working through and making sure that you’ve got the right experience around personalization. Here’s some great examples in markets. I’m going to go to the next one, Katie. Thank you. Grow faster. Options across the subscriber life cycle. There’s so many things that are important. Right? It’s the five PS of marketing. You’ve got pricing and promotion and payments and all of those great things. The things that we always encourage our customers to test and our partners to test is trial length. Right? That will have a big impact. It’s very different by industry.

Theresa McEndree:

We’ve got some best practices that we’re happy to share with you guys and benchmarks by industry. The different trial length, right? And whether it’s a paid trial or a free trial, and how that engages with your customer. Flexible payment methods, you see here that 50% of consumers will abandon cart without their preferred payment method. Right? We’ve seen there’s a lot of alternative payments that are coming out, whether it’s some of the newer but tried and true like a PayPal, Venmo. There’s a lot of volatility in buy now, pay later right now. So just as you expand globally and consumers payment preferences change, it’s a really important part of that subscriber experience. Billing frequency, 67% of consumers prefer monthly. Thinking about those one time purchases, the custom bundles, the ability to really curate your own experience with subscriptions, it’s such a magical combination and works really well for our partners.

Theresa McEndree:

Ad based tiers. We’ve seen a lot of this in the news lately, right? Maybe 1499 a month isn’t right for me and I’m willing to consume ads, right? For a lower tier, maybe even freemium. Right? It’s now this blending of we’ve moved away from ad revenue and now we’re infusing it back in some areas, right? Subscriber revenue we’ve seen on the publishing side is going up, ad revenues going down. It’s really this interesting shift of where and how and when consumers are willing to pay for exclusivity and content, and when they’re willing to trade a little bit of their time for lower cost. Again, it’s that personalization of how they want to consume and subsidize.

Theresa McEndree:

Registration versus paywall. Do you have people registered? Do you do ramp pricing, right? Where it’s introductory or by piece as well as gift options. There’s a lot of permutations, right? To test and engage with your audience on. And all of these help move the needle, right? Whether it is acquisition or long term retention, all of these play out differently when you look at subscriber lifetime value. Next please Katie. Thank you. Here’s a great example of Time Magazine, right? They’ve done a really great job of introducing different types of consumption models. They’ve got a lightweight digital offering, a more robust digital offering, print and digital, right? Some people like me, you still like to leave through a magazine on a Saturday morning with your coffee and put the phone down hopefully for 30 minutes.

Theresa McEndree:

They offer multiple ways to engage. They’ve got great bundles for subscribers to drive different engagement with different types of cohorts, and they have different plan levels associated with different levels of value. So just a very great example of how one partner has really presented this level of customization and a good job bundling for all the different price points and different engagement points. Grow smarter. How do you use data to drive retention and grow your relative ARPU, your average revenue per user and lifetime value? Subscriber feedback begins at sign up and retention opportunity is obviously flow through sign up through the entire relationship. It really gives you data and making sure that you capture the right information to continue to engage with that subscriber in a really meaningful and targeted way.

Theresa McEndree:

You can analyze different sign up cohorts and subscriber segments to really narrow in, who’s your ideal subscriber and how do you want to manage each cohort? If you think about the Time example, somebody that’s engaging for 99 cents is going to have a really different performance arc than somebody that’s committed to a digital and print performance. Right?And how do you tweak all of those different options to really create ideal lifetime value, ideal revenue within each of those cohorts. And you guys know your businesses best obviously. And so it’s really right. Is it channel entry point? Is it plan? What’s the right mix of how you develop those cohorts and start to optimize those? Right? That’s the wonderful world of data analytics and really how you deliver those insights. And then really analyzing your voluntary and involuntary churn for reasons and applying those to the cohort. So lots of great opportunity to continue to refine and optimize your retention.

Theresa McEndree:

Don’t disrupt the subscriber experience. We talked a little bit about involuntary churn. You’ll see on the right, there’s 13% of recurring transactions are actually at risk of failure. Right? There’s 2000 reasons a payment can fail. Some of them are super obvious, like the card date, the card has expired, right? But then there’s the other 1,999, which are a little more nuanced and reflective of some of gateway logic or some processor logic and all of those things. And so being really adept or partnering with somebody that’s really adept at understanding and optimizing in a dynamic way those opportunities, you reduce your involuntary churn measurably. Right? And so looking at this, apply preventative measures. Really make sure that you have a strategy to peel off any of those potential risks. Right?

Theresa McEndree:

It’s typically in retry logic and dunning campaigns, how you both apply a payment try, but then how you communicate around those. Launch dynamic, automated payment retry logic. We’ll talk a little bit about what that means, and then the dunning best practices. So the communication around a payment or a payment failure, right? Including automated multichannel communications. This is one of our customers. Right? After implementing our platform, they saw a 45% decrease in card declines. Right? There’s a lot of opportunity when you think about that revenue per user in the overall lifetime value, to really optimize and reduce this involuntary churn. I also want to apply a metric. I’m working with my team so we can come up with one. But also think about the brand hit that you’d take. Right?

Theresa McEndree:

If I want to sit down and watch a movie on a Friday night and I try to log in and it’s like, there’s a problem with your account. Right? I’m going to have to put down my glass of wine. I’m going to have to call customer service. Nobody wants to do these things. Right? And so you really start to tarnish your brand. Right? It is obviously highly measurable from a revenue impact and revenue opportunity, but it’s the brand. Right? And it’s the experience that your consumer is having, and you never want to create an unnecessary reason that somebody has to call in to your customer support team, right? Or has to reenter credit card data. There’s just a really great opportunity, both from revenue, which we all love, but more importantly consumer brand experience, right? Which is the ultimate halo effect.

Theresa McEndree:

Next, please. When you think about dynamic credit card retry logic, right? We talked about the 2000 plus reasons that a credit card or a payment can fail, and really a one size all fit is not the right approach. We were really founded on the ability to have this dynamic retry logic, where there’s advanced analytical models used really to hit all of the different data points and hit them in a very intelligent, driven by machine learning way to optimize the payment success. So minimize we say, we never want you to fail a customer because ultimately that’s what it is. There’s a wonderful commercial and monetary benefit to it, but there’s some different cohorts and different dynamic logic and analyses that you should be looking at to apply.

Theresa McEndree:

We can go on to the next slide. When you think about dunning effectiveness, this is really the impact of communications around a payment retry or a payment failure. If an invoice goes past due, make sure that you have full visibility into how the communication campaigns are impacting, right? That ultimate payment success. And what you would really say is a subscriber save. Monitor you’re dunning recovery over time, continually optimize. Right? It’s a communication campaign, so a lot of emphasis should be placed on the retry logic, but also the communications around it. Sometimes a consumer will have to reenter, they’ll have to put a new card in if the old card has expired. And so really making sure that you create a very positive, well communicated experience that reinforces all of your wonderful brand tenants that you work so hard to build.

Theresa McEndree:

Super important to have data analytics around this, because there is a ton of opportunity. If you think about 7% overall payment volume a month, right? That’s something you need to make sure that you’re paying very close attention to, from both the retry logic, how different gateway is impacted, different payment methods, as well as the communication that surrounds it. So lots of wonderful best practices here that we’re always happy to share over at Recurly. Growing stronger. Right? As we grow, we do all of this, we take care of our consumers, right? They continue to grow. How do you scale? Right? Really making sure that you’ve got the opportunity, the scalability within your platform to grow high velocity, high volume transactions.

Theresa McEndree:

Always applying industry best practices. There’s all of the certifications, right? Making sure that you’ve got that covered, whether it’s from data compliance, cardholder data compliance, and overall opt in and make sure that you’re using best practices there. Really ensure that you’re anticipating challenges. It is a fast moving market out there, right? Subscriptions have become wonderfully competitive. Consumer demands evolve and accelerate on a daily, hourly basis, and really lean into the entire subscriber life cycle, even that cancellation. We’ll talk about some tips and tricks there.

Theresa McEndree:

One of the things that we’ve seen, Twitch does a phenomenal job to build community and loyalty. So driving engagement within that subscriber base. There’s a huge opportunity to create a sense of community with subscribers. We’ve run studies, right? There’s the core reasons that people love subscriptions. One of the things that we’ve seen move up in importance is that access to exclusivity, right? Whether it’s exclusive content, if you are streaming content, whether it’s an exclusive experience, right? If you’re in store or have some physical environment, whether it’s early access concerts, that type of stuff, people really love the community and that exclusive benefit. Here’s a really great example, brands with an emotional connection have a 306%, very specific, 306% higher lifetime value. And we all know that. Right?

Theresa McEndree:

If you look at the early days of credit cards, right? American Express has always been heralded as having that great community, that great brand, exclusive access moving forward to digital natives. Twitch does a phenomenal job as do a number of other brands. Just something to think about. Here is one of the big things that we’ve learned, the pandemic restrictions forced a lot of people to change their habits. We rolled out the ability to pause and the communications around that. And what we learned is that 52% of consumers actually prefer pausing over canceling. Right? They have participated in your brand. Right? They don’t want to disengage completely, they’re not saying no, they’re just saying not right now.

Theresa McEndree:

So the ability to offer a downgrade or even a pause, right? This had to be true for some in person subscriptions during pandemic lockdown, right? You just couldn’t go. And so entire instead of losing your entire subscriber base or your entire member base, giving people the opportunity to hit pause was huge. Because then when we eventually moved out of restrictions, you could reengage them and reactivate versus reacquire, which is a very different motion. Pause is incredibly important as well as downgrades or the ability to upgrade on the positive side when you’re looking at subscriber retention. And then more alternatives to cancel, right? It should be a positive experience. You really want to make sure that you take full consideration of legal and brand sentiment impact. Right?

Theresa McEndree:

We’ve all had that experience where you literally cannot find a phone number and you want to call something, and you’re like, I tried something, it’s just not right. If you make everybody jump through hoops, they’re never going to do it again. Right? They’re never going to say, hey, it wasn’t for me, but I’m going to recommend you to a friend. It is going to be a negative sentiment experience. It should be a multi-step process, but not too many. Right? There’s always a fine art of three to five steps where you confirm you offer another alternative and then you offer the ability to pause. Also get the opportunity for feedback and insight. Right? That’s how we all do better and grow our businesses and get smarter and launch new products and really refine our approach.

Theresa McEndree:

And promotions based on data. This works extremely well. My own experience, my daughter, she’s four, she was on an eLearning platform. I was like, she’s not using this enough for the month to month fee. I went to cancel. They’re like, hey, we’ll give you this really wonderful annual subscription offer. And I was like, all right, I’ll take it. Right? It was just my perceived value wasn’t at the monthly rate, but the annual rate, I was like, that’s good. Right? I can stomach that for the amount that she uses it. 65% of consumers they’ll prefer and engage with a positive customer experience over advertising. Right? We all know this. It’s really about your brand experience, your subscriber experience, that creates true value and true equity in the marketplace.

Theresa McEndree:

Next please. I think we’re getting close to the close here. We’re in this to keep a good thing growing. We love subscriptions. We love our partners. It’s such an exciting way to engage consumers and really, how do you grow faster? The flexibility to test and iterate. You need to continually evolve and enable personalization and go global with ease. Grow smarter, you need 360 subscriber insights that really give you the ability to optimize your relationship, ultimately which optimizes your revenue and grow stronger. Right? The expertise and tech stack to really support this scale. You guys are going to do many great things and you want to make sure that you’ve got the technical harness underneath you to scale when something goes viral on Twitter, in a good way, right? Or you’ve got a big event or a huge sponsorship land. So really making sure that you’re driving the growth and planning for it.

Theresa McEndree:

We will say, so we’ve been doing this a long time, we’ve got a ton of amazing data at an aggregate level and best practices. And so we would like to offer out a complimentary benchmark analysis as far as retention and revenue recovery. If anybody’s interested, my email is down there. You can also hit us up on our website. So backed by data from millions and millions and millions of monthly transactions, we really look at an assessment that looks at revenue recovery and what it should look like for your business and needs. So really strong benchmark that shares data from other people within your space. Data backed predictions of how much revenue you can recover each year. So a strong ROI model. Right? If you’re contemplating things, it’s always helpful to go to the CFO and say, hey, here’s what we’re going to get, right? There is a cost of not switching or not changing.

Theresa McEndree:

And a complimentary churn success kit. Right? What do you do with this? What are the best practices? What’s the more actionable takeaways around this topic? On average, the revenue that we’ve been able to recover on behalf of our partners is 70% and it’s increasing by about 12% month over month. Just really great to of know your numbers and see what’s right for you as you guys continue to grow. Thank you. That’s the end of our me talking at least for a little-

Kathy Greenler Sexton:

[inaudible 00:39:10] Q&A. Oh my goodness, that was fabulous, Theresa. I have to tell everybody that so many of the points and the data are just right on point. I’ll give you a little behind the curtains story here. Subscription Insider, we write news about the subscription industry. And what happens if we cover a story about subscription brand X or subscription brand Y, and those subscription brands don’t have a good customer service set up on their website, we start getting the calls. We actually have a very good insight of who does this really well in terms of supporting people and people getting their questions answered online or through other channels, because everybody’s calling us. I guarantee you there’s probably a half a dozen companies that are online, that we’ve gotten calls from their customers.

Kathy Greenler Sexton:

It’s amazing. It’s amazing. They will leak out and try and find answers. It’s best they come to you first. We do have a number of questions. And as you saw in the chat for whatever reason Zoom is being cranky today and doesn’t want you to use the chat feature. If you have a question, use the Q&A, just click that Q&A button at the bottom, just put your questions in and we will answer them. A lot of questions about trials, and that’s not surprising to me because I get a lot of questions on that. Ramp pricing and free trial strategies, how do they compare? Because many people have had both strategies and I’m curious what your thoughts are on that.

Theresa McEndree:

No, it’s wonderful. Free trial, we’re all familiar with ramp pricing, right? Is where you graduate people into a full trial. What we’ve seen and what we recommend is offer both. Right? Really at the heart of personalization, let people choose, because you’re going to have different types of customers that want to engage in a different way. If you set up your analysis and your cohorts right, you may find a winner, you may also find that they both work. In talking with our customers and looking at our data, it’s really a recommendation of put them next to each other and let the customer choose and do it in an elegant way.

Kathy Greenler Sexton:

Love that. Love that. This person must be from an OTT subscription platform because they are wondering if there’s an average trial length that ensures conversion. I’m sure the answer might be, it depends, but I’m curious how you look at that, and what is a successful trial?

Theresa McEndree:

Yes. We know that data royally at Recurly. I do not have that at the tip of my fingers, so I will get your information. We have streaming benchmarks that I’m happy to provide, that include some free trial data. I just haven’t committed it to memory quite at this point. I’ll follow up with you. It does depend, right? The overall value of the subscription. Right? When you look at OTT, it can be 999 a month to over 49, $50. The length of free trial really depends, but we do have a deeper analysis and that industry specific benchmark that I’ll make sure that we follow up with you on.

Kathy Greenler Sexton:

And speaking of which, if anybody in this Zoom webinar, if you have any questions about getting a slice of data that’s specific to your business, just add it to the Q&A and we will follow up afterwards.

Theresa McEndree:

Absolutely.

Kathy Greenler Sexton:

We’ll get to you and we’ll make sure you have that data.

Theresa McEndree:

We can slice it anyway.

Kathy Greenler Sexton:

Absolutely, absolutely. Here’s another comment, Theresa. Interesting insights around becoming more omnichannel. Do you see any non-traditional channels to keep an eye up for?

Theresa McEndree:

Well, there’s lots of noise obviously around the metaverse as people are moving into Web 3.0, however we want to define that. I haven’t really seen that take a stronghold. What we have noticed is obviously subscriptions if you look in the past three years, really digitally initiated, right? Social engagement was huge. Consumer behaviors are changing and we’ve seen this huge move out of home. Right? If you’ve been in an airport, everybody’s traveling, people are going out to restaurants again. And so there’s this fervent move out of home.

Theresa McEndree:

So for those of you that were exclusively online and really using all of the digital channels, it’s great to challenge your team to think about how you could add in-person, right? And how you could add of out at home because so many consumers are craving experiential and really that extension. It’s also a great way to build that community that we saw, Twitch is obviously online and that’s inherent to their business. There’s a lot of fun evolutions that are coming out as a hybrid in-person and online.

Kathy Greenler Sexton:

Love that. Love that. The next question. And thank you Katie. Because I wanted just to do a slight plug here. What’s the next alternative payment method for consumers? Because I really want to hear from you guys and then we actually have a mobile wallet panel with PayPal and Adobe that people might be interested in, because it’s such a hot topic for subscription companies and it doesn’t matter if you are a subscription target to consumers or to business. It’s such an important issue for all of us to really understand.

Theresa McEndree:

I’ve been in the payments landscape for a very long time now and it’s been really fascinating as these alternative payment methods and digital wallets have really emerged. We saw accelerated growth in the last few years. Most of the industry pundits said it was about a decade’s worth of growth in a year as far as the adoption of some of these nascent means. I think if you look at alternative like PayPal, Venmo, they’ve moved out of alternative into mainstream. There’s been a lot of interest on behalf of our corporate customers in concepts like buy now, pay later, the consumer engagement and how that’s going to play out. Right? It’s an interesting model when you look at subscriptions and carving out a monthly payment into monthly.

Theresa McEndree:

I’ve been in payments a long time, you’re creating a little bit of a vicious cycle, right? As if you’re taking a monthly payment, chopping it up into multiple payments, you’re going to put a consumer at a cliff and a point where they’ve now compounded a delayed payment and that’s just bad for everybody. Right? It’s a bad financial experience from a consumer perspective. It’s bad as far as trying to get your payment. And then if you look globally, there’s a lot of different payments that are coming out. One of the things that’s really been poor at Recurly, is we are gateway agnostic. So we really adopt the idea that you need to provide the flexibility of payments and the flexibility of gateways to ensure payment type and payment processing that best fits your consumer. That’s-

Kathy Greenler Sexton:

Well, so so much activity in that area. I have another question here. Let me just shift and if there’s more questions we can always come back to this as more come in. For all of the B2C companies that are on the call today, how do you think subscriptions are going to be over the holidays?

Theresa McEndree:

NRF always puts out a holiday forecast in September. I don’t have that meaty data yet. I would assume we’re cautiously optimistic about this holiday overall. What I love for subscriptions is we’ve seen this trend over the last few years, that people want experience and people want meaningful gifts. Right? You don’t want the ugly sweater. People don’t really want to just give gifts of like I got you a gift, here’s a token. It’s become increasingly important for gift givers, especially younger gift givers, that that gift connects. And so subscriptions continue to grow from giftability, right? If you think about the different boxes, if you think about giving somebody a year of Apple News or Time Magazine, it’s great because A, people love the gifts and B it is the gift that keeps on giving, right? Which are some of the core principles of any gifting.

Theresa McEndree:

So as people have recalibrated their priorities and really want their spend and their gifting to be a little more intentional and experiential, subscription gift is going to continue to grow. So really exciting opportunity for this holiday. I think it’s going to be a great one for our industry.

Kathy Greenler Sexton:

You talked about this before, about the ability to pause subscriptions and it was the big talk in the midst of the pandemic. Do you think it is the big strategy moving forward as well?

Theresa McEndree:

I think it’s a huge part of personalizing the experience, right? Because month to month, quarter to quarter, your priorities change your ability to consume, your financial standing. So giving the people, right? Because not being able to pause, it’s like you’re in or you’re out. Right? And so pause we’ve seen wonderful return. The data point we showed was that 52% of consumers prefer pausing. And it’s the ability if somebody’s indicating that they want to exit their subscription, make sure that you don’t read it as they want to exit being my customer. Right? They want to exit the current value and the current relationship that they have with you.

Theresa McEndree:

It might be the downgrade. It might be the pause. Right? And it’s really, when you think about your data architecture and how you think about pause, it’s like, what information do you need question one to present the right offer or the pause, right?

Kathy Greenler Sexton:

[inaudible 00:50:06] how you think about [inaudible 00:50:07], that really just turns it to customer centric and really being able to serve them in such a strong way. Love that. Love that.

Theresa McEndree:

Has to be relational.

Kathy Greenler Sexton:

Absolutely. We are getting to the end of our time here. I want to just ask if there’s any final recommendation or one thing that if people are leaving this they can really think about and implement to really help them with keeping their customers?

Theresa McEndree:

It’s a bundle of recommendations. Right? It’s move fast and make sure that you have the ability to iterate and test, because, man, consumers, we’re a fickle people and we really want the options and the experience. So honing in on that for your particular business with guidance of best practices is really wonderful. Obviously analyze the why, make sure you’ve got the right cohorts, make sure you’ve got the right testing frameworks and then plan for growth. Right? Global expansion is wonderful. We’re all in the business of scaling and subscriptions do that wonderfully.

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