Get, Keep And Grow: Why Subscription Retention Is All About Slick And Personal
With holiday shopping getting underway amidst a challenging economic climate, the timing and importance of retaining subscription-based customers could be the difference for businesses looking to have a strong finish to an otherwise challenging year.
Although there are growing concerns that a large number of consumers might cancel some of their subscriptions, Vindicia Global Vice President Solution Evangelist Michael Daley told PYMNTS that acquisitions are still outpacing cancellations.
“Keeping your customers in any way you can is very important,” Daley said, noting that businesses need to be flexible, not rigid, when dealing with customers.
“Giving people the opportunity to move from one [subscription] package to another is certainly a way of stopping them from churning completely,” Daley said, pointing out that companies that offer choice are faring better than companies that are relatively rigid.
To that point, Daley said companies need to offer a “very slick process,” whether retaining existing customers or acquiring new ones. In addition, simple things like providing various payment methods will build trust and make a more personalized service experience.
“Treating the customer as an individual entity, not just a subscription, is very important,” Daley said.
Active Versus Passive Churn
At the same time, Daley said it is important for businesses to differentiate between active cancellations and passive ones. While active cancellations are intentional, many subscriptions get canceled passively for unnecessary reasons that could be avoided and addressed.
One prime example might be a subscription that terminates due to an expired credit card of an otherwise happy customer, Daley said, making a case for granular data to deliver a better understanding as to why a renewal might have failed and what the underlying problem is.
More Focus On Data
Like many businesses, Vindicia has also witnessed how the pandemic has accelerated the digital shift, and in its case, the uptick of subscriptions.
“What would have taken maybe a few years has been condensed into a few months,” Daley said, noting the rise in people “trying to get on the subscription bandwagon.”
As a result, he said his company has emphasized getting more out of the data it collects and then using it to offer customer actionable insights.
This includes understanding fundamental issues like subscription uptake, renewal rates and revenue, to more granular points like whether monthly, quarterly or annual subscription packages perform best.
Ultimately, Daley said, the goal is to deliver real-time data insights that clients can access and implement on their own versus the previous way that involved either visiting a client’s office or, most recently, hosting a Zoom call.
“What we’re really looking at now is how can we get a lot more of those insights in front of customers in real time that doesn’t require us and one of our business analysts to go out and talk to them,” he said.
“So, mining that data, getting those insights and putting it into a form that is consumable by end businesses is certainly what I’ve got a lot of focus on as we go into the end of this year and into 2021,” he added.