Subscription success demands a laser focus on providing subscribers with consistent value which leads to predictable recurring revenue. We recently explored the topic of subscriber acquisition. Now, in our newest e-book, we outline techniques, tactics, and best practices that subscription businesses can use to increase subscriber retention.
One way to promote subscriber loyalty and retention is via upsells, cross-sells, and even downgrades. For example, once a subscriber has been using a product or service for some time, you may want to upsell them to a longer-term plan at a more economical price per unit.
Cross-selling works similarly. When a subscriber purchases something that is complementary to their original subscription plan, they get more value out of their subscription and your business diversifies its revenue stream. This type of ‘hybrid billing model’ can increase both revenue and customer satisfaction.
Downgrades, too, can have a positive effect on subscriber retention. If the subscriber is not perceiving enough value at their current price point, a less-expensive option may be a better fit for the customer—and your business. Correctly billing the subscriber for the changes to their account, including prorating charges, is one of the more complex aspects of subscription billing and requires a platform that is designed to handle these changes with ease and accuracy.
Despite your best efforts, some subscribers may still decide that the value of your product or service doesn’t exceed the cost. Offering a discount or coupon to a subscriber who’s at risk of churning, or who has churned, may win them back.
Subscription commerce businesses can lose otherwise happy subscribers through involuntary churn—a form of attrition which happens as a result of card declines and invoice failures. Over time, your subscriber billing information on file may become outdated, and can result in payment declines, lost revenue, and ultimately subscriber churn. An Account Updater service is a critical first step in reducing payment declines. Another critical step? An effective dunning strategy, which can boost payment recovery significantly, if implemented correctly.
Recurly goes several steps further to increase transaction success rates. Using machine learning, the Recurly Revenue Optimization Engine can detect patterns in invoice failures and predict which transactions are more likely to succeed, increasing revenue by an average of nine percent each month.
Advanced statistical models craft the ideal retry schedule for each individual invoice, using the data gleaned from processing hundreds of millions of recurring transactions from a wide variety of subscription commerce businesses. This sophisticated technology delivers greatly improved results when compared to a one-size-fits all approach, recovering an average of 61% of failed subscription renewals.
These are just some of the topics discussed in detail in our latest e-book. Download it now to learn more about how you can put Recurly to work and grow your subscription business.