New report from Recurly - The 2024 State of Subscriptions

One thing that I like to read is benchmarks. It allows you to understand your performance and if it is good - brag about it. One of my favorite benchmarks is State of Subscriptions by Recurly that they have been publishing for many years. So without further ado let’s dive in the most recent one.

The most concerning data - acquisition rate is going down: from 5.3% in 2020 to 3.7% in 2023. Obviously the devil is in the details - it’s a mix of various industries and for example data from 2020 could be inflated by various online services that spiked because of the work from so it would be great to see data from before. But anyway it’s a sign that competition is also high and merchants should present their value.

Probably that’s one of the reasons why the number of merchants who offer subscription addons went up from 16.9% in 2020 to 28.1% in 2023. Addons allow you to configure a basic plan with various options so it’s more convenient from a customer perspective. For example, one of my favorite subscription boxes is the Butcher Box. Every month I cook pretty much the same stuff but from time to time I might do something special, like turkey for Thanksgiving or pork roast for Christmas. This is very add-ons or even the ability to add one of items to your subscription matters a lot. On top of that it will allow you to increase your LTV.

Churn rate remains the same from year to year - around 4.1% But what’s interesting is - reasons for the involuntary churn. Number one reason for sign up churn - fraud. We also see that on our side and the big threat here is bot attacks. Considering the fact that you can just buy stolen cards in DarkNet, then ask ChatGPT to create a script to use them for purchase, merchants have to think a lot about protection these days.?

Another interesting aspect of churn - Generic decline as a number one reason for renewal charges, almost 40%. What’s problematic here from a merchant perspective - there is no visibility of what's going on here and if that’s your case you might consider switching your payment provider to someone who will show you detailed data upon which you will be able to act.

Last but not least - payment methods benchmark. I would like to highlight the fact that alternative payment methodsthey represent about 20% of charges with PayPal dominating the market. They also have the lowest chances to churn and are used less in fraudulent transactions. It will be interesting to see what will happen with ApplePay since they released MPAN and what will happen with Amazon Pay after v2 release.

Highly recommend reading the full report and big thanks to Recurly team for sharing this, super interesting.

By the way, big thanks to the Recurly team for including my quotes into the report, it’s a big honor for me!