Subscription Business Success

6 Techniques Top Subscription Businesses are Using to Retain Customers

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When times get tough and revenue streams begin to thin out, it is essential for businesses to take a step back and reevaluate. With social distancing now a reality of our everyday lives, businesses have been working hard to optimize their online capabilities to ensure that they can still reach their customers online. Because of COVID-19, the process of digital transformation has been happening at a speed never seen before. As a result, businesses that have monetized these services will outstrip competition that fail to make that change.

However, many businesses have been prepared for such market turbulence well before the global COVID-19 crisis. How? By operating through a subscription business model. Zuora’s 2020 Subscription Impact Report showed that subscriber acquisition has actually been staying strong during this turbulent time, with an incredible share of over 75% of businesses not being negatively impacted by the virus. In fact, 22.5% of subscription companies have seen their subscription growth rate accelerate, and an additional 53.3% report not seeing a significant impact on their subscriber acquisition rates at all. This is pretty astonishing considering how badly many sectors have been affected.

Although the overwhelming legacy of 2020 will be that of the global catastrophe we are currently facing, this year will also be recognized as a catalyst for the surge of digitalization and e-commerce. Soon things will start to get moving again and the market will not go easy on those who have not risen to the new set of challenges which COVID-19 has brought about. But how have these subscription businesses remained so strong? And what strategies can be taken away from their business approaches which have enabled them to retain and scale their subscriber base?

1. The automation of the business process.

Having the ability to automate internal processes can be the difference between companies that will come out of this crisis in good shape, and companies that won’t. Why? Because digital infrastructure that automates business processes enables the effective nurturing of customer relationships.

Process automation spans across all aspects of running a business – it includes operations such as billing, sending emails, creating and distributing invoices, enabling customer self-service capabilities, and so on. With the right technology, essential business actions can occur without needing a member of a customer service or finance team. This speeds up internal processes and reduces the chance of human error. This is particularly significant for subscription companies that are looking to scale their subscriber base. It would be near impossible and incredibly costly to process these sorts of tasks at scale by human beings, so it is necessary to have the digital capabilities which can manage such processes effectively.

According to a recent Harris Poll survey, 92% of business leaders agree that to survive and flourish companies must enable digital channels and process automation. Nurturing customers is a topic that has been around for a long time, but the approach is constantly being developed, particularly within UX. Customers want easy and seamless experiences throughout their subscription lifecycle. The recurring nature of subscriptions means that the customer will interact with you multiple times during their journey. Therefore, all those touchpoints need to be convenient and ready to handle the demands of the customer.

2. Mastering self-service in subscription e-commerce.

Optimizing your e-commerce infrastructure should be your number one priority right now and self-service capabilities are an essential aspect of such an upgrade. Since COVID-19 took hold around the globe, businesses have had to shift all possible commerce online and optimize their e-commerce tools. We all know that the customer is king, but they are becoming ever more demanding. This is why technical architecture needs to be able to handle the demands of the consumer through self-service tools. Giving customers the ability to take control of their own subscriptions, such as upgrading, canceling or purchasing an add-on, is of paramount importance. A recent study by McKinsey & Company has revealed that the use of digital channels when ordering from suppliers has increased in importance between 2019 and 2020. Additionally, the study found that customers within the B2B sector value digital self-service more highly than ever before.

3. Understand why your customers are churning.

Having an understanding of why your customers are churning seems like an obvious point, but the true reasons are easy to overlook or misunderstand. Having the capabilities in place to understand why your subscribers churned can help create a strategy to avoid such losses in the future. By capturing such reasons, it is possible to get a greater understanding about what your offering might be lacking. Such information can be analyzed and used to guide your strategy in the future.

More importantly, it is also possible to gain this understanding even before the customer has been lost. By gathering data about behavioral patterns, one can deduce which customers are likely to churn by making strategic predictions from their actions. For example, if a Netflix customer is only watching a single show on their service, then what will happen when the series ends? Will the customer cancel their subscription? What can be done to avoid this and keep the customer engaged? In order to collect this data, subscription businesses need to have the right technical infrastructure in place to automatically capture, analyze, and make predictions about the customer.

4. Be prepared to be flexible.

Being flexible is key. With a self-service customer portal, you empower customers to manage their subscriptions themselves – use this freedom to your advantage! Give customers options once they have subscribed to your product or service. Subscriber journeys do not stop after sign-up; for example, maybe a customer will want to upgrade, downgrade, or change their payment plan.

According to data from hundreds of large subscription-based companies that use Zuora, 70% of their revenue comes from upsells and other events that occur after customers sign up, rather than from the initial sign-up itself. This indicates that knowing your customers and predicting what goods and services they would be willing to invest in beyond the initial subscription sign-up is an essential part of a subscription business. Churn rates plummet by over 10% when a customer makes just one change to a subscription per year, so it is essential to be flexible and give your customers options.

5. Keep your offering simple.

However, it is equally important to not overcomplicate things. Think about your company’s core values and minimize extraneous products and promotions, and you will see the benefits. Too many product offerings are associated with lower growth, so when considering which product or service to market, it is essential not to overcomplicate what you are selling. Offering multiple products or subscription tiers will allow customers to customize the product to their needs and build in easy upsell opportunities as companies outgrow each tier. However, offering too many choices can lead to indecision and lower sales; a study indicated that consumers were more likely to make a purchase when offered 6 jams (40%) instead of 24 jams (3%). An overcomplicated product line with too many choices and decisions adds an unnecessary burden to the consumer and can be taken as a lack of confidence in your own brand.

6. Guide your subscribers to stay.

An advantage of the subscription economy over the traditional ‘product economy’ is the ability to build stable, mutually beneficial relationships with consumers. Subscriptions provide flexibility for customers and, in turn, this flexibility enables subscription businesses to be resilient in uncertain times. How? Because there are many options you can give to your customers as an alternative to churning. In times like these, having a clear strategy about how to strengthen the relationships with your customers is essential. Part of this strategy should be based on providing alternatives to cancellations, such as freezing subscriptions, delaying payment requirements, or changing prices. Offering such alternatives when the market is turbulent will help improve customer trust and loyalty, and therefore reduce subscription cancellations.

If a customer does freeze their subscription, it is essential to use this time wisely to find out why they froze and what you can do to encourage them to unfreeze. 2checkout found that 10% of customers who cancel auto-renewal would have preferred to pause their subscriptions if this was an option. This reflects a need for subscription businesses to accommodate for time and money constraints, travel obligations, and the seasonal nature of some services. This is especially the case during a global crisis where customers may have to reconsider their daily expenses but may be willing to return when circumstances improve.

A final note

Having developed a sound subscription business model pre-COVID-19 already puts businesses in a more comfortable position than many of their competitors. However, there are differences in the degree to which companies manage to take full advantage of this good position. It is undoubtedly true that automated back end processes and capabilities are the real ticket out of this crisis. Most of the success criteria listed above belong to the set of virtues that make subscription businesses so competitive in digital markets. For companies that have not yet ventured into the realm of the subscription world, now is the time to do so. No industry is exempt from the opportunities of the Subscription Economy. By ensuring that your customers adopt your offering over an extended period of time, you can focus on expanding your customer lifetime value. This not only benefits cash flow but enables a strong relationship between you and your consumer, so you can continuously provide value to your customers, even when times get tough.

keylight seamlessly integrates digital subscription systems across all industries worldwide. Their flagship software Subscription Suite is the leading subscription commerce platform that enables businesses to manage and sell subscriptions. Find out how keylight can solve your subscription business challenges at

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