Your clients may be among the many businesses that have embarked on a subscription model as a way to boost revenue. They should be taking extreme measures to retain their subscription clients as competition grows in this channel. Brightback’s 2020 State of Industry report describes the marketing tactics the most successful subscription businesses are using to increase customer loyalty.
The Challenges of Retaining Subscription Customers
Many consumers consider subscription services a must-have service. They enjoy the surprise of unboxing what they’ve ordered. And they like the convenience of having the products delivered to their homes. The interest in this line of shopping even extends to cars and trucks. Despite that interest, consumers often cancel subscriptions after they look at their monthly budgets and realize they must reduce monthly expenses.
Your clients know that acquiring new customers is more expensive than retaining existing clientele. But, how can they keep customers engaged over a long period of time when their only contact point is the delivered box of goods? It turns out that a variety of marketing tactics can increase retention rates.
Best Marketing Tactics for Retention
Businesses should understand that a potential cancellation of a subscription poses an opportunity. When the right marketing tools are in place, businesses can strengthen their relationship with existing customers. According to Brightback, about 43% of subscription businesses currently retain between 6% and 25% of clients who are prepared to cancel.
Over 80% of subscription-based businesses believe they reduce churn by focusing on a few key strategies. First, they track why clients cancel the service. A good email exit survey can provide plenty of data. And these kinds of email communications might also entice clients to continue their subscriptions. Proactive subscription companies will promote better customer loyalty programs (17%) to increase retention. They’ll also look for new ways to engage customers (11%). These methods might include email or social media outreach. In addition, subscription companies can use email messages to offer a less expensive subscription. That’s what 37% of these businesses already do.
To retain current clients and attract new ones, subscription businesses will use the following marketing tools in 2020:
- Discounts 50%
- Bundles or cross-selling promotions 39%
- Releasing new education content 28%
Subscription company success also depends on acquiring new customers. In 2020, 80% of these businesses say that customer acquisition is one of their top priorities. They’ll face plenty of competition. Brightback's industry analysis shows major brands will enter this channel in a big way. While many subscription businesses operate in niche categories and appeal to a narrow range of consumers, they'll increasingly be competing against large companies like Amazon.
Encourage your clients to offer unique products, keep their product mix fresh and advertise frequently to prove their value. Part of their continued success will depend on their online presence. You can run a Digital Audit on them to get that information. The tool is available at AdMall from SalesFuel.