Delivering a "Good" Subscriber Experience
I've written quite a bit about subscriber experience already, so I won't go back through the definition. If you want to read more background you can check out this post I wrote for subscription management supplier Zuora. I will focus more on the why and how in this post. It may seem obvious, but providing a good subscriber experience has many benefits to your company. What does providing a good subscriber experience do for your business?
Increase Subscriber Engagement
While you can’t create subscriber engagement, that’s the subscriber's choice, you can provide an experience that can lead to engagement. An engaged subscriber has tremendous potential value for your business. Gallup Research found that customers who are fully engaged represent an average 23% premium over the average customer in share of wallet, profitability, revenue and relationship growth. Engagement leads to loyalty and satisfaction. Engaged customers, according to Bain and Co., spend between 20% and 40% more than other customers.
Increase Subscriber Retention
A subscription business grows because of new logo acquisition and also expansion through upsell, cross sell and increased footprint in an existing subscriber. The means that continued growth is more than just finding new business, it also relies on retaining and growing existing subscriber relationships. According to Forbes Magazine acquiring new subscribers can cost up to 5X more than retaining an existing subscriber. Management consulting firm Bain and Company research shows that increasing retention by 5% increases profits by 25%-95%. Successful subscription businesses pay close attention to net dollar retention (NDR).
Retention is related to two factors; 1. the subscriber has the perception that the solution delivers enough value for the price paid and 2. you provide a digital experience that meets the subscriber’s expectations. Meeting the subscribers expectations may seem like a daunting task, but in reality it is more about keeping routine interactions routine, than about some lofty vision of “delighting” the subscriber. In other words, subscribers want processes and systems to work the way you tell them they will, and if they don't, they want you to explain the issue and quickly “fix” it.
Increase Customer Lifetime Value (CLV)
Generally, subscription pricing leads to higher CLV, at least as long as the subscriber continues to renew your service. Of course the service itself must offer value by supporting the overall, ongoing strategy of the subscriber’s business. Beyond the value of the service though, the potential for increased CLV is greater for a subscription when the subscriber experience is good. If the experience is positive there is increased likelihood that you will be able to upsell packages, expand the solution footprint, add additional users or increase metered pricing metrics and usage.
Increase Brand Equity
A subscriber’s perception of your company and brand is in large part based on their direct experience interacting with you, your employees and your systems. Creating positive experiences across all the interactions with a customer leads to a positive brand perception, which has the potential to create loyalty and advocacy. It also often supports premium pricing and packaging, leading to increased CLV.
Think of the value of increased brand equity in two categories, tangible and intangible. Tangible value comes from the ability to premium price as well as upsell and cross sell to increase account penetration. Intangible value is more difficult to measure, but equally important for the business. Increasing market awareness, customer goodwill and advocacy are all byproducts of increased brand equity and have measurable impact on the business.
Reduce Marketing Costs
Word of mouth is one of the most effective ways to create market awareness and grow a business. According to a recent Nielsen survey 92% of consumers trust word of mouth / recommendations over advertising. Creating the best subscriber experience provides an opportunity to have subscriber advocates to support business growth. Positive subscriber reviews can provide a very effective way to grow your business as well. There are several technology review sites that are highly influential in buyer decisions, including G2, Gartner Peer Insights and IT Central Station. Encouraging subscribers to leave reviews for your products creates a ready pool of references and advocates.
Delivering a Good Subscriber Experience
It’s easy to see why a positive subscriber experience is important for your business, but what can you do to provide a “good” subscriber experience?
Integrate a seamless end-to-end subscription process
Subscribers expect consistency of experience across all touch points. A process breakdown is one of the most obvious ways to create a bad experience. The systems used to manage the order to revenue process needs to be completely integrated so that there are no gaps in the process and data flow, particularly around system handoffs.
Deploy a complete self-service solution
According to recent research conducted by Salesforce, 65% of customers would rather help themselves through self-service for simple issues while 83% say they expect immediate response when they contact a company.
Make a complete view of the subscriber a reality by eliminating data silos
Integrated customer data is a key element in providing a seamless subscriber experience. It also has tremendous value to you by supporting better data driven decisions across a range of functions including retention and renewal, packaging and pricing and issue resolution.
Automate subscription management processes
The are many points across the subscription lifecycle where automation and workflow can improve the subscriber experience and save you effort.
Build a services company culture
Many high tech companies in traditional revenue models are very product focused. The shift to a subscription business means that the long term health of the business depends on renewing as many customers as possible, so shifting the focus from the product to the customer is an essential culture shift.
Focusing on the subscriber and subscriber experience through a services company culture creates many positive outcomes for the customer and the business. Contact us if you want to explore ways to improve your subscriber experience.
