The marketplaces over the globe have drastically evolved in the recent period, becoming more utility-based than ever. The dawn of the subscription economy has been one of the reasons for this illustrious evolution.
Were we aware of this? Yes, we were. The subscription economy existed right from the period when trains were running on steam, automobiles meant wooden sledges and Pluto was still a planet. Right from the newspaper hawker to the milkman, every one of us has unknowingly been a part of the subscription economy.
For more than seven years, the Subscription Economy has continued to thrive, growing more than 350%, as consumers increasingly tend to demand access to convenient, digital services over the ownership of the physical product.
Roots of the Subscription Economy
As per the marketer Phillip Kotler- “An average firm loses its customer in less than five years.” And who would have even thought that this single line would become the foundation for the subscription economy? People shifted from the product-focused traditional model to the customer-focused subscription model.
The recent SEI data reveals that the revenues of subscription businesses grew five times faster than the revenues of the S&P 500 companies.
The most desirable customer in the world is your customer. There’s always an utter thrill and enthusiasm in generating leads and acquiring customers for a newly founded company, but for the subscription economy, customer retention is the whole and sole conception. The entire process is customer-centric and starts by procuring the tiniest of the information about your customers. And from there you can move ahead, start a conversation with the customers and drive them into your subscription business. The digital transformation has made it easier to establish a substantial bond with them.
The whole customer retention process can put you in dire straits if you don’t follow and assimilate these 5 strategies:
1. Customer data to be kept as an open book
All the information on the customer base should be known to every single entity in your business such that everyone can deal with the customer on similar ground and in the best possible way. This results in a better understanding of the customer and cross-functional participation in customer-related issues.
2. Analyze and understand your KPIs
KPIs are very crucial in driving your subscription model. Thereby, you need to perform an in-depth analysis of the overall model and seek out the necessary KPIs. This way you’ll have the perfect insights, a crystal clear image of your engagements, and can easily implement your game plans with a flattering success rate.
3. Utilize the right platforms extensively
In this tech-savvy world, digital means of communication have become the soul of the subscription economy. Be it social media, emails, directly hosted forums, or calls, you have to seek out ways to reach your customers, take appropriate feedback from them, and improve the customer experience.
Around 65% of the customers aged 18-34 feel that social media platforms are effective channels for customer service.
4. Express gratitude towards your customers
You need to be clear about one thing in mind that you and your business are nothing without customers and hence always need to be thankful to them. For that, you have to make the finest usage of your CRM services to reach out to your customers on their special occasions or suggesting them about future purchases or maybe just a regular check about the smooth running of the services provided.
5. Always preach your future plans and implementations
To stay a step ahead of your competitors, you need to include your customers in your milestones and successes. In this subscription model, you need to let your customers know about your long term plans, the latest trends to be followed, and provide them a better vision. This will help to develop a bond and customers to stay loyal.
Why Customer Retention over Customer Acquisition?
Retaining the customers requires an ‘out-of-the-box’ approach and seeking assistance from the traditional model of marketing isn’t going to take you any forward. Your actual duty doesn’t start when a customer buys your product, but it actually begins when he starts using one. And when you’ve opted for the subscription model, you should always be asking these 3 questions to yourself:
1. How can you keep your customers happy, sustain loyalty, and meet their demands?
You have to make sure that you provide your customer with the best services or products over a period of time. Be it maintenance or giving updates you should be thorough and consistent from your side. Make sure to establish that special bond and sustain it for a lifetime. Take feedback and implement them to improve things from your side and this will assure you a loyal customer base.
2. How will the customers come back to you month by month?
If your services aren’t good enough, then there’s a strong probability of your customer choosing your competitor over you. This shifting of the customer base is just the beginning and would turn your business to dust in no time. Hence, looking after customers and taking care of them like a newly born baby is paramount for running a smooth successful business. Stay flexible with your subscription model and your customers undoubtedly will renew their subscription every month.
Over 69% of the consumers say that customer service is extremely important when it comes to loyalty to a brand.
3. How should you elevate the customer base from the existing one?
You should understand the fact that people do speak when they meet and if you aren’t giving the best, negative word-of-mouth publicity is going to take your entire business model. So don’t just sugarcoat your services but provide an outstanding customer experience. One strong impression on the other person is going to add significant weightage to your customer base. And without any sweat, you’ll see it elevating in no time.
Once you are crystal clear with your thoughts and have answers to these questions, you will no longer be in a dilemma between-retention and acquisition.
Adding The Last Piece of The Puzzle
In business, nothing is more important than your customer itself, so you have to take ultimate care of their ROI and give them the top-notch services for their investments. Providing elite customer experience and boosting long term goals are sure to guarantee your success. Hence, to survive the ever-evolving subscription economy, a strong focus on customer retention is of utmost importance.