Despite the negative economic impact of the Covid-19 pandemic, the subscription economy arose as an anomaly in terms of its increasing success. Upon reflection, the subscription boom was caused by a number of factors- the need for convenience, increased rates of ‘online shopping’ as a substitute for access to physical stores, and as a method of trying new things and starting new habits during the periods of national lockdowns.
The success of the subscription model was so great that surveys revealed around “20% of all American households subscribed to some form of retail service during the pandemic.”– Business2Community.
The question on many people’s minds now is, how will subscription businesses continue to prosper in 2022?
What Differences a Subscription Business Might Face Over the Coming Year:
Economic projections for 2022 are facing a level of uncertainty due to the current nature of the pandemic, meaning that (yet again) it is difficult to predict trends and areas of success. However, what we have learnt about subscriptions throughout the pandemic so far- especially in terms of customer behavior– provides us with a lot of data that can be used to compose your subscription business strategy successfully in 2022.
One of the current changes in the subscription economy to be aware of is the initial novelty of the subscription model wearing off for a large number of customers. Many have been signed up to at least one subscription over the recent years meaning that they are less likely to trial a new subscription if the offering itself doesn’t appear to fit their needs. Although this might initially appear to put your subscription business at a disadvantage, it can actually act as a positive long-term factor in gaining you better quality, more loyal customers. As your particular subscription offering is meeting its intended audience more accurately rather than becoming lost in the sea of subscriptions, your business is less likely to suffer the loss of customers after a short period of time.
Another potential difference that your subscription business may experience this year is a shift in your customer catalog due to changes in employment. Now that the world has become more comfortable with a hybrid work model, or a WFH (work from home) set-up, employment and business operations are becoming more stable, suggesting a potential shift in the needs and wants of customers to fit their more consistent and assured income.
Like every market, change is inevitable, but this doesn’t mean that your business shouldn’t prepare itself. Keep reading to see our tips on keeping your subscription business a success in 2022…
How to Keep your Subscription Business Prospering:
Tackling customer churn the right way
We know that customer churn is inevitable, but that doesn’t mean that there’s nothing your business can do to minimize its effects. One of the most valuable things that you can ensure from the get-go is that you market your subscription offering more accurately for your target audiences, so that as you grow, the customers you gain are of greater value to your business from the start. Although you don’t want to narrow down your audience too much, your long-term business churn can be reduced by gaining higher-value customers, even if this means less customers overall.
Evaluating your customer base is essential to discover how valuable your customers are to your business and what demographic your subscription offering fits best. For this, efficient data collection and analysis is the best way to meet your needs. (Check out our tip on data collection below for more guidance on this.)
Once you have lost customers to the churn cycle, another thing to look at is how to regain them. Not all customers who unsubscribe will be lost customers, and this makes having a winning-back focus very beneficial. Keeping your communication flow open in terms of newsletters, company updates and notification of subscription deals that you are offering makes it easier to regain those customers that you may have lost at some stage.
Nailing your company’s data collection
Creating an effective method of collecting and using customer data is a great way to ensure your business’s success. Having relevant data available to use in your business campaigns means that your marketing angle can be better catered to your current customers and intended target audience.
Start-ups and less technologically oriented businesses may feel like they don’t have the resources available to collect this data, yet introducing simple initiatives such as customer questionnaires can be a great way of beginning your data collection process. If you have an e-commerce store, data collection is also available to you in the form of customer tracking across your pages, and understanding where you lose your customers to understand potential checkout-abandonment.
Data collection doesn’t need to be overly complicated and can look different for every business, but ensuring that you listen to your customers is great for understanding exactly what needs and wants you are aiming to cater towards.
Increasing the flexibility of your offerings
Including the option to upgrade and downgrade for your customers is a great way to boost your subscription success and retain customers if and when their needs begin to change. For example, the option to drop to a lower-level less costly plan for a period of time when a customer has less disposable income available is likely to keep them as a loyal, paying customer, rather than losing them.
The option to add on one-off purchases and ‘bolt-ons’ to subscription offerings is also a great way to incentivise your subscription success, as it allows customers a level of greater customization in their plans to find an option that meets all of their needs. Flexibility with your subscription offering only increases your available target audience as well as customer satisfaction levels- making customers feel more valued, and becoming of greater value to the business themselves.
How Can Billforward Incentivise Your Subscription Business’s Growth?
Whether you’re just starting out or looking to boost your subscription business’s growth, ensuring that you have a flexible and capable subscription management platform is essential. As your billing partner, Billforward provides reliable subscription management software to rule out the chance of human error, and keeps flexibility at the heart of everything that we do so that you can meet your own business needs, and the needs of your customers. Having a billing partner that doesn’t hold you back is essential for the future growth of your company, which is why we offer a range of features and integrations that make globalization and domestic business growth even less of a headache.
Why not book a discovery call with one of our billing experts and see how we can help you meet your subscription goals!