Presented by Recurly
While subscription models offer huge opportunities for growth, they inevitably add complexity to your acquisition and retention efforts, but there’s a solution for that. Hear from a panel of experts on how to drive subscriber growth and LTV in a competitive landscape at this VB Live event!
Free access on request here.
By 2023, 75% of DTC brands will have a subscription offer. Today there are endless possibilities to subscribe to all kinds of products and services in all kinds of industries, from software and loot crates to fitness, clothing, food, and so on. . The pandemic has brought about a number of changes in the subscription market, but as things continue to change and settle in, it has become clear: there is no bubble. Subscriptions are here to stay.
“What’s going on with consumers, they’re spending more money on subscriptions within their budget – it’s now part of life,” says Logan Dunn, growth manager at Wyse. “For this reason, we don’t just compete with Ring for subscriptions, we compete with the subscription budget world.”
The pandemic has supercharged the subscription world, says Alycia Simpson, senior director of demand generation at Recurly.
“The pandemic has taken a world already focused on convenience and accelerated it,” Simpson said. “When COVID hit, it was no longer just a desire to get things delivered. It was really a need. “
According to Recurly’s report, “The Impact of the Global Pandemic on Subscription Growth Rate,” businesses across all industries have seen an increase in testing, conversations and subscriber growth, in some cases greater than 100%, when COVID has hit. Online education and learning has increased by over 300%. Among subscription growth, consumer goods saw a 148% increase at the height of the quarantine in May.
Subscriptions also solve motivation, notes Jeff Bladt, vice president of pricing and inventory at ClassPass. In the fitness industry, their goal is to convert people to the highest level of motivation – they get more people to sign up for a fitness membership in January because the current self is more motivated than the future self, says -he.
“It extrapolates across categories,” he adds. “Memberships are a great way to sway motivation. Our internal job is how to keep that motivation high or, when it’s low, how do we react?
Development of prices and packaging
Part of keeping motivation high and a running follower is making sure new and existing customers respond favorably to your pricing and packaging points.
Bladt notes that for ClassPass, they see their product as access to purchase, with a credit system that allows subscribers to pay for what they use, rather than a tiered system that excludes customers from experiences. top of the line.
“I hope that by putting [a lot of] adding value to the product and by expanding our supply network we can keep users longer or, ideally, get them to move on to larger plans, ”he explains. “It creates this natural marketing focused on the use and the lifecycle that we do in the product. But for us, we never wanted to prioritize the experience in an unnatural way. We want to prioritize experiences based on the essentials we want which is for users to use the product as intended.
Success comes from careful consideration of pricing and packaging, Dunn says. At Wyse, they have been very successful in bundling subscriptions and hardware: over 50% of their customers choose this added value.
“We’re going through the same thing Jeff just talked about, working on how we make an unlimited plan,” he says. “It’s an easy way to show value, but it’s so much more complex on the business side. There is so much thought to be given to how you price and package.
Payment methods as a growth strategy
The success of your subscription business is directly impacted by the payments you accept and how you accept them. the millennials who rely on Venmo, or you go global.
“It’s about flexibility for consumers,” says Simpson. “Do you have what you need to be successful at all levels? “
Businesses using Paypal have seen a 25% increase in conversions and a 19% increase in revenue across the board, she says. And when it comes to retention, for cases where a payment is declined, having another payment method for the customer means you haven’t lost that customer due to an unintentional churn rate.
“What ultimately drove us to take things beyond simple credit cards seriously was to go global,” says Bladt. “In the United States, you can hack it, at least initially, using credit cards as your exclusive means of interacting. But once you move to Europe, credit cards make up a minority of our purchases in Germany, for example, where direct deposit is much more common. You have different paradigms in Asian markets.
Prevention of unintentional unsubscription
Unintentional attrition is one of the biggest issues a subscription company can face – around 14% of all recurring transactions are likely to fail, notes Simpson, which strongly affects revenue, once you start. to invest money in these transaction numbers. But there are several ways to attack unintentional unsubscribe.
The first is to be proactive, using things like an account update program to ensure that correct credit card information is updated before a renewal is processed. The second method is to be responsive, using dunning best practices, to eliminate one-size-fits-all retention marketing. Recurly uses machine learning and the data it has accumulated over the past 11 years to analyze the most effective strategies for an individual subscriber. This includes looking at when they signed up, what they signed up for, the payment methods they use, etc. to optimize that stimulus rate.
“You talk to that person in a way that will be the most effective, and how many times are the most effective, to get that person back,” says Simpson. “It also means it’s not just about doing bucket denial codes. Understand what the specific rejection code was, what card it came from, etc.
Listen to the whole conversation, including the tactics to tackle voluntary unsubscribe! Access this webinar for free now and learn more about building portfolios, optimizing acquisition efforts for LTV, building propensity models, the cost-effective way to offer trials and coupons, and Moreover !
Free access on request here.
You will step away from the conversation with information about:
- The Most Effective Channels That Drive Subscriber Growth
- How to approach pricing and packaging
- Tactics That Boost Customer LTV
- Strategies to be implemented during renewals and cancellations
- Jeff Bladt, Vice President of Pricing and Inventory, ClassPass
- Logan dunn, Head of Growth, Wyze
- Alycia Simpson, Senior Director of Demand Generation, Recurly
- Seth Colaner, Moderator, VentureBeat