Sharath Dorbala, CEO of Vindicia, discusses how 2020 transformed the subscription commerce landscape, and how subscription-based merchants must embrace eCommerce to succeed long-term. “Subscription-based companies will need to continually transform and reinvent the value of their offerings to drive appeal across various customer segments and stay ahead of the competition,” Dorbala says in this excerpt from The Connected Economy’s Power Source – CEO Edition.
2020 was a transformative year for the subscription industry. Despite a global pandemic, an economic downturn and widespread social upheaval, the stay-at-home lifestyles that defined the past year spurred enormous demand in subscription goods and services, proving new opportunities to monetize interactions.
As we move toward a post-pandemic world, we see tremendous opportunities for subscription-based merchants to fully embrace eCommerce, digital transformation and the recurring value of subscriptions in order to position themselves for sustained growth. To succeed long term, companies will need to continue building on the lessons of 2020.
Understanding The Customer Journey
Subscription-based companies will need to continually transform and reinvent the value of their offerings to drive appeal across various customer segments and stay ahead of the competition. Understanding the complete customer journey is an important piece of this puzzle. Every customer interaction is an opportunity to increase engagement, build relationships and drive brand loyalty. Unnecessary friction at any point can put long-term revenue in jeopardy.
Mapping out the customer journey requires businesses to operationalize systems and business processes to measure every aspect of the organization. Businesses must be able to leverage subscription intelligence, insights to track engagement at different stages of the subscription lifecycle to understand for example, what drives a user to go from a free trial to paid subscription and increase conversion, or what factors are most likely to put a longtime customer at risk for churn. With those insights in hand, companies can refine services and touch points to ensure they continue to deliver meaningful value to all customers.
Retention Strategies Will Remain A Priority
If 2020 was a time of unprecedented growth, then companies should be thinking about the best ways to keep those new customers in the fold. After all the hard work to capture more subscribers, the last thing businesses want is for those users to cancel services and jump to another provider.
Now is the time to assess existing retention strategies and analyze past interactions for opportunities for improvement. The best retention strategies take a holistic approach focused on the full customer experience, addressing both active and passive churn. The overarching goal is to create a frictionless experience across the entire subscription journey from acquisition and onboarding to renewal and even post-cancelation.
When tackling active churn, remove pain points at any stage of the subscription lifecycle that might lead to low engagement. That might include user experience issues that make it difficult for customers to navigate the subscription platform, or gaps in the onboarding process that prevent new users from getting the most value.
Strategies to address passive churn should focus on billing and payment issues that result in an unintended cancellation. For example, an account may be canceled after a failed payment transaction due to outdated payment card information. Companies must go beyond basic efforts like dunning to embrace more sophisticated, analytics-driven strategies to prevent those kinds of scenarios.
Every subscription provider strives to deliver a great experience and customer satisfaction. Often, it’s the insights, data intelligence, the flexibility of the enabling platform behind these efforts and execution that separate companies that actually achieve these goals and those that become industry also-rans.
Selected by EFXA