Five Proven Ways to Increase Subscription Loyalty for Scale

Recurly is a Business Reporter client.

Subscriptions are a two-sided coin: convenience for the consumer and recurring revenue for the company. However, subscription loyalty needs to be earned by proving the subscription value over time.

How do you earn loyalty? And how can loyalty lead to exponential growth and scalability? By analyzing the habits of more than 50 million subscribers on the Recurly subscription management and billing platform, we’ve isolated five takeaways to increase subscription loyalty for scale. 

Neutralize involuntary churn

While companies work tirelessly to avoid voluntary churn by diversifying offerings or optimizing the subscriber experience, involuntary churn because of failed payments can prematurely end a subscriber relationship. With numerous reasons why a payment can be declined—from card expiration to insufficient funds, to gateway failure—subscription brands need be proactive with their payment management efforts. 

Subscription management techniques, such as the ability to automatically and dynamically retry failed payments based on unique subscriber and payment data—payment type, decline reason, subscription plan and so on—work in the background to minimize and recover failed transactions while preventing them from failing in the first place. In fact, Recurly helped its customers recover nearly $800 million in revenue in 2021 alone. Furthermore smart dunning campaigns—the process of communicating with customers (usually via email) to arrange for the collection of overdue payments—mitigate subscriber churn by automating subscriber notifications of account updates. 

Be flexible with promotions and pricing

A recent survey by Recurly found that inflation concerns 87% of subscribers in Europe, so subscription brands need to refine their offerings as price increases are the primary reason for cancellations. 

If a subscription business needs to increase prices due to inflationary pressure, a great way to go about this is to test pricing plans and personalized promotions. A study by Deloitte, confirmed by more recent consumer research, found that 71% of consumers who customized a product would be prepared to pay a premium. Bespoke offerings and unique content are key ways to both acquire and retain subscribers. Customizing offers and the consumer experience based on the subscriber profile or local market—from free trials and gift cards to promotions and various billing models—are ideal methods to deliver value to support price increases and propel loyalty.  

Localize, localize, localize

International businesses understand the potential headache of having consumers from all corners of the world. From tax and compliance regulations to payment methods, commerce considerations are endless but essential. However, one of the most important elements to consider when scaling a business is content—especially exclusive content. But content is only as relevant as it is understood, so its localization is key for global audiences. 

When expanding globally, a business should be able to charge in the currency and communicate in the language local to subscribers, no matter where they are in the world. And with a growing list of available payment options, having the gateway flexibility to extend choice to your customers is imperative. In Europe, 50% of subscribers prefer to pay via PayPal and/or Wise, followed by credit cards (45%) and ACH or recurring checking account withdrawal (29%). 

Going beyond in-home subscriptions

As pandemic restrictions fade, consumers are eager to spend their time and money on in-person activities such as dining, domestic and international travel and entertainment and events. Therefore, it’s more important than ever to create an omnichannel subscriber experience that caters to these returning desires. 

Traditionally, the subscriber journey starts at the first point of contact with a brand and ends when a consumer cancels their subscription. But now, that journey has evolved into a web of experiences. Start by improving quick touchpoints such as upgrades, add-ons and gift options; these are easy ways to enhance the experience. Then ramp up your efforts with digital and in-person events, partnerships, opportunities for social good and much more. In doing so, you’re creating a holistic brand and subscriber experience that presents value in novel and diverse ways. 

Optimize all touchpoints—even goodbyes

Renewal and cancellation experiences are some of the most invaluable learning opportunities for brands. More than half—54% of those surveyed—cited the ease of signing up for or changing a subscription as one of the top reasons that drive subscription signups, so make these experiences frictionless. However, many subscribers just want a brief halt in their services, and enabling a pause feature places control back in their hands and defers or prevents cancellation. While enabling a pause may freeze the subscription temporarily, it continues the consumer relationship and maintains engagement. No matter the outcome, renewals and cancellations are ideal times to ask for feedback and improve. After all, the best subscriber experiences incorporate real feedback from real customers. 

Retention and the customer experience go hand in hand, and at the core of any successful business is a satisfied customer. To establish loyalty is to create a subscriber experience that understands consumer needs from all angles—from payments and promotions, signup and cancellations to localization and brand perception.

This article originally appeared in Business Reporter.

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