Key subscription model strategies for an increasingly competitive landscape (Stock Market Pioneer Live)

Presented by Recurly

 By 2023, 75% of DTC brands will have a subscription offering, but the days of one-size-fits-all are long gone. Join this Stock Market Pioneer Live event for insights as a panel of industry experts share their secrets for driving subscriber growth and LTV in a competitive landscape.

Register for free here.

“There’s been a long shift in advertising and commerce over the last few decades, one that is putting more and more power back in the hands of the buyer,” says Alycia Simpson, Senior Director of Demand Generation, Recurly.

The change lies in everything from the way information is shaping the buying process for B2B and B2C, to cloud-based technology changing the way we “own” software, to how subscriptions are creating a new relationship between a business and its consumer — one based on value, she says. Behind this shift, there are a few reasons why consumers and businesses alike have been drawn to subscriptions.

For the subscriber, they have more convenience and control than ever before. They can get whatever they want, from pet toys to millions of songs to business software, for a small recurring fee, rather than having to manually go out and purchase the things they want every time. They can cancel or pause when they want. When it comes to finances, subscriptions can make products and services more accessible; since subscription fees are usually consistent every billing period, consumers can fit them into their budgets.

For businesses, a well-managed subscription business can bring in predictable MoM revenue and smooth out revenue spikes, making it easier to forecast, budget for R&D and operational costs, and track business performance and make adjustments as necessary.

“And subscription businesses grow 5x faster than other businesses, which means the growth potential is incredible,” Simpson says, “so it’s really no wonder you see subscription model companies doing better than their non-subscription counterparts.”

The challenges in adopting a subscription model

The subscription model comes with its own set of quirks, however. Counting on a stream of recurring revenue means a consistent focus on keeping churn, both voluntary and involuntary, at a minimum. That means not only continuing to delight your subscribers and making your subscription offerings better, but also effectively minimizing failed payments.

And while acquiring new subscribers obviously matters a great deal, you also need to keep the customer lifetime value (LTV) of your existing subscriber base growing, which happens when you’re able to cross-sell and upsell subscribers and keep engagement high.

Finally, the subscription model requires you to stay on top of recurring billing and payments —you can’t afford to fall behind — so you need to automate as many of these processes as possible.

Stemming the declined payments and cancellation drain

A big problem develops when companies put all their energy into subscriber growth, focusing solely on bringing new subscribers in the door. They forget about the ones they’re quietly losing every month — the customers who didn’t mean to leave. In other words, failed payments.

Too often, businesses don’t know how to handle this invisible churn. They’ll try to duct-tape a recovery process together by manually chasing down subscribers after the fact, asking them to update their payment information. Or they’ll rely on archaic one-size-fits-all retention marketing efforts. But that doesn’t work anymore, Simpson says.

“Using technology like account updater functionality, expiration date pushing, and machine learning-powered retries can pack a big punch when it comes to true subscriber and revenue growth,” she says.

Many U.S.-based companies don’t offer alternative payment methods beyond credit cards, and that’s a big missed opportunity, she says. Lots of consumers (especially younger ones) prefer things like Venmo, PayPal and Apple Pay, and consumers outside the U.S. clamor for local payment options and may often prefer direct debit.

“If you care about expanding your subscriber base, you need to make sure payments aren’t stopping you from growing,” Simpson says.

Another oft-overlooked optimization area is the cancellation flow. The cancellation screen can actually be a powerful retention tool. To keep a customer from cancelling outright, you can offer the ability to temporarily pause a subscription, a different way to pay, an alternative plan, or a promotion.

The personalization opportunity

Personalization is a great way to encourage subscriber engagement, create loyalty, and consistently deliver on value. Start your personalization efforts at the signup flow: learn as much as you can about who’s signing up — from their preferences to how they prefer to pay you — and then keep collecting feedback over the first few months to ensure your offerings are as relevant as possible.

PupBox does a great job of this, Simpson points out. The service asks for things such as your dog’s name, age, breed, and food/toy preferences right when you sign up, and also regularly asks subscribers for their feedback on a recent delivery. This enables PupBox to continue delivering relevant, personalized, and exciting things every month that your dog will love. Once PupBox gets to know your dog’s preferences, switching to a competitor becomes more challenging — that’s the power of personalization.

And it’s more than just tailoring an offering or customizing an email. How you segment your database is the crux of your acquisition and retention efforts.

How a subscription model can drive LTV

Driving LTV requires the right tactics at every stage of your funnel to deliver value, Simpson says. You need to make sure you’re always surprising and delighting your subscribers at every turn. “Additionally, you must not only report on LTV — more importantly your CAC:LTV ratio — but also leverage forecasting models to predict LTV of subscriber subsets. The goal is to always be optimizing for LTV and what’s going to drive revenue,” Simpson says.

“Keeping a close eye on these metrics can really help determine your profitability and your business’s long-term health.”.

To learn more customer acquisition cost strategies, how to segment your customer database, and a look at how the top subscription companies are dominating their segments, don’t miss this Stock Market Pioneer Live event!

Register here for free.

You’ll walk away from the conversation with insights on:

  • The most efficient channels that are driving subscriber growth
  • How to approach pricing & packaging
  • Tactics that are driving customer LTV
  • Strategies to implement during renewals + cancellations


  • Jeff Bladt, VP of Pricing and Inventory, ClassPass
  • Logan Dunn, Head of Growth, Wyze
  • Alycia Simpson, Senior Director of Demand Generation, Recurly
  • Seth Colaner, Moderator, VentureBeat

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