5 tips to succeed at subscription commerce (a growing $15B market) ??
The subscription e-commerce market continues to see rapid growth, with McKinsey's latest figures suggesting it now totals between $12bn and $15bn in the US alone.
Despite the growing popularity of brands such as these, subscription companies typically face high churn as they struggle to keep customers over time.
So here are 5 tips for you to reduce customer churn & thus make your subscription program successful.
?? Predict potential churners to rebuild a connection - Any customer who has signed up for subscriptions can potentially cancel at any time, but some customers are more likely to cancel than others. If you can figure out who these customers are, you can work harder to make them stay.
Data can how much a customer used your product or service before they left. Machine Learning can strategically predict which customers are high-risk based on their actions.
?? Ask customers why they want to cancel - You can collect this data via a simple online survey, by email, or over the phone at the point of cancellation. Make it easy by giving a few multiple-choice options, plus give them the opportunity for open feedback
?? Develop real-time customer profiles to stay relevant - One reason customers cancel subscriptions is that they no longer have the same level of need or interest in that particular product or service. This can be avoided by adopting a data-driven approach.
By leveraging legally-compliant third-party data on customer behaviour and interests outside your owned channels, you can use AI tools to develop more accurate customer profiles in real-time.
?? Re-engage through the right channel at the right time - Using AI-based marketing automation, you can better understand your subscribers’ preferred channels of communication (email, app push, in-app messages, SMS, messengers, etc), their top times of day for engagement, and what types of creative formats they respond best to.
?? Explore partnerships to provide added value- Teaming up with another brand can not only help your bottom line, but it also allows you to offer subscribers something new and desirable – increasing re-engagement and reducing churn. Instead of simply guessing which partnerships might be valuable for your subscription brand, leverage AI-powered customer insights to explore ones that could provide added value to your subscribers.
"Retention not only ensures repeated sales but the overall cost rescues when focussing more on retention comparing the ROI generated. Retention is the key to long term sustenance"
says Mudita Pandey, Product Lead at 1mg.com. Listen to how the subscription model at 1mg helped the brand boost it's customer retention here