Subscriptions are expected to grow 653% in the next 4 years
Subscriptions are expected to grow 653% in the next 4 years.
What you may not realize (which most companies also don’t) is that subscriptions can provide significant positive financial outcomes for a company including, but not limited to:
1 - Higher customer lifetime value (LTV)
2 - More predictable budget and inventory forecasts
3 - Greater business valuation for exits
Keep in mind, however, that adding a subscription-based product or service doesn’t just mean simply setting up the ability to get an ongoing shipment or service for a lower cost and ultimately put it on autopilot.
It has to be done right, or, it could either hurt the brand or be a lackluster waste of time and effort.
Proof that subscriptions are here to stay:
∙ In 2021 alone, existing subscription box brands grew their customer base by 31%
∙ Offering subscriptions has been shown to increase overall customer purchases.
∙ The average U.S. consumer now has (4) subscriptions
To be successful at subscriptions, these (4) methods are essential:
1 – Avoid the ‘add-on’ approach – Figure out your consumers’ unmet needs and how your subscription program will solve a business problem rather than mindlessly tacking on subscriptions to existing services and products.
2 – Win new customers by providing value—the right pricing, offerings and benefits
3 – Reduce churn by fixing credit card failures, saving canceling customers with the right solutions, upgrading and upselling term lengths and winning back canceled customers
4 – Retain customers with great products or services and a variety of great experiences
Do you have a subscription?
If yes, are you providing value and great experiences while also reducing churn?
If not, what’s stopping you?