The global market value of the subscription economy is projected to exceed $1.5 trillion within the next two years1 . However, only about 20% of the businesses using a subscription model are expected to succeed in their efforts to increase customer retention2. Keeping a strong, engaged customer base during these times of inflation and uncertainty is challenging but is achievable with increased knowledge and proactive intervention.
Subscription based businesses must know their customers well to survive the price/value analysis.
Understanding your current and prospective customers’ needs, motivations and reasons for doing business with your organization is critical for both retention and new customer acquisition. The reasons why customers choose your subscription and continue to pay for it every month, quarter or year should not be a mystery. Likewise, the reasons that customers cancel should be appreciated.
Connecting with your customers regularly and categorizing them into segments and personas allows your organization several advantages including the knowledge base from which to:
- Create, refine, and reinvent content, products and services in a manner that is relevant to each significant customer segment and personas.
- Appreciate expectations and deliver experiences that meet and exceed those expectations.
- Establish pricing that is aligned with your customers desired and perceived value.
- Deliver personalized content, products, and services.
- Anticipate future needs to drive innovation, maintain market position, or gain market share.
Why you should have ongoing conversations with your customers
In addition to perceived value, consumers report boredom, lack of variety, lack of novelty and irrelevant or unappealing content as reasons they cancel their subscriptions2. The best way to keep customers interested is to know them well, personalize content and offer relevant services, products, and content at the right price point. Customers need to feel the value of their investment continually. As offers, products and content slips away from their core interests or becomes stale or irrelevant, your value diminishes, opening the door to cancellation.
Becoming an integral part of your customer’s routine by customizing your offer based on known interests, needs, desires, attitudes, and behaviors creates a strong connection that positively impacts your organization’s position in the cost/value equation to remain on the “keep” list.