Buying or consuming individual products seems more and more like an antiquated practice. In today’s world, consumer habits keep morphing and evolving into more of a brand-consumer relationship rather than single or isolated transaction events.
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The Subscription Economy isn’t new; while companies like Netflix have come to define the model in recent years, it’s actually been around since the 1700s. Centuries ago, publishers and authors created relationships with their clients, so that they could receive manuscripts on a regular basis in exchange for a set fee.
That same model grew throughout the centuries and appeared in several other forms across multiple businesses, but it wasn’t until the coming of the internet that it took a different trajectory and became one of the cornerstones of how we as consumers exist and behave within the global market.
In the game of exchanging goods, digital content, and services, the number one rule is to keep the main player happy. There’s simply no sustainable future for the subscription-based business without loyal subscribers. Correspondingly, it is critical that businesses and providers pay attention to their clients and nurture their needs. If they don’t, somebody else will.
The reality is that most markets are saturated, and it is more important than ever to build a long-lasting relationship with your consumers. That can come in many forms, from fantastic customer service to just delivering exceptional content. The truth is, their attention could easily be taken elsewhere, so it is in the publisher’s best interest to keep them happy. It is exponentially cheaper to retain a consumer than to procure a new one.
Scoring a new subscriber is great but building a strong bond and keeping that relationship over time is the real game changer. A loyal, satisfied subscriber is such an asset for any company; they are a reliable source of income and an omnipresent brand evangelist for potential new subscribers.
It is estimated that businesses spend five times the resources during the process of subscriber acquisition than when applying strategies to retain existing customers. These investments tend to go into market research, marketing costs, sales, promos, and first-time discounts without the guarantee that there will be a return in the form of new digital subscriptions.
A model that focuses a good part of their attention on retention rate has better chances in building a prosperous business in the long run.
Having a clear idea of what a customer, audience, or reader wants, and needs will help steer them in your direction and increase their LTV (lifetime value). Tracking analytics and behaviors helps in determining what your customer expects from the business, which in turn helps you better cater to them in a more efficient way.
Offering perks, rewards, or incentives encourages the subscriber to stay in the loop so they don’t miss out. It can also create a sense of reciprocity where they feel like they are part of the community, and they are being considered in different ways beyond the transactional.
There are so many ways out there in which people can spend their money. Competition is relentless, so reminding digital subscribers to stay connected before their attention span goes to a different venue is crucial.
There are any number of reasons why a customer may decide to churn, such as dissatisfaction with the service, product or content or subversion of the necessity. Those are voluntary decisions. But sometimes there are involuntary drops because of preventable factors such as payment failure, lack of updated billing information, or merely obliviousness. That’s when friendly reminders to update an account or continue a subscription come in handy.
Everyone knows how frustrating it is when treated poorly by customer service or simply the inability to find the right person that can help with their problem. It can be incredibly damaging for a business-customer relation. Creating a division and emphasizing the importance of exceptional CX can help increase customer loyalty, satisfaction, and longevity.
A company might have a groundbreaking idea for a service, product, or content creation, but if the processes or the navigation within the service are complicated, inefficient, or unfriendly, there’s a chance that potential suitors will lose interest faster than when they got it. By building a desirable user experience, you increase both your credibility and your affinity with your customers.
CRM stands for Customer Relationship Management, and it refers to the sum of strategies that a company uses to analyze customer data in the form of interactions and usage. Those inputs ultimately tell you (as a company) what is working and what’s not working, so you can make strategic decisions moving forward. Determining your CRM of choice is ultimately a highly strategic choice that will help you make intentional decisions for your customers.
There is an expected or an acceptable margin of subscription cancellations for every subscription business. Needless to say, the lower this margin is, the better for a company.
The churn rate is the percentage of lost customers over a period. The formula to calculate this rate is as follows:
In a specific period of time number of lost subscribers/number of subscribers at the beginning of the period x 100% = churn rate
Working with your finance division, you can likely understand what is the churn rate limit that your company can sustain, so you understand how to draw attainable objectives and pivot your strategy as needed to reduce churn and increase retention.
Studying the above churn rate metric could help you identify subscribers who are at risk of jumping ship, and better meet their needs before they go. Good examples of other signals that might affect churn are increased visits to the fee or cancellation page, unusual patterns of activity, lack of activity, and negative commenting across social media.
All the above strategies are part of the same unifying principle which is that the subscriber must be the number one priority for any company who strives to grow in this hyper-competitive data-driven environment.
The generation of products, content, and services must ideally go together with in-depth market insights and projections on subscriber behavior. Any company who wishes to retain existing subscribers should pause and dedicate time to listen to their consumers.
At the end of the day, data is the solution. It can help you understand how to better retain your subscribers, and help you identify the best future subscribers to your publication. It gives you informed insights to listen to your users, meet their needs, and increase their lifetime value, and therefore strengthen your business in kind.
Join publishers like The Wall Street Journal that are reaching more subscribers by partnering with Invisibly today.
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