Payment Methods

In Subscription Commerce, Seconds Matter

In Subscription Commerce, Seconds Matter

Make sign-ups fast, trials free and features rich. These are some of the quick takes from the latest PYMNTS Subscription Commerce Conversion Index, where SaaS/cloud computing merchants pulled ahead of business services providers, among other surprises.

Ranking the performance of nearly 200 subscription commerce brands using aggregated scores, the latest Index notes the entry of Disney+ into the streaming wars in late 2019. Though not without snags, the launch marks the literal “Disneyfication” of streaming subscriptions.

The debut clearly sets a new standard for subscription commerce and user expectations around it. Those expectations really are the whole ballgame, as merchants are reminded of the high value of satisfied subscribers – and what it takes to keep them that way.

Saas Goes to Disneyland

The big gainer in the most recent “SubCom” Conversion Index itself wasn’t Disney, but Software-as-a-Service (SaaS) and cloud computing. The category ranked No. 1 in Q4 2019 for the first time in a year, beating the reigning champ of the previous three quarters, business services. SaaS providers outranked others by offering more free trials and giving customers more of a voice.

The absence of friction is also a big indicator of how users rate their subscription experiences. This is how B2B merchants scored higher than their B2C counterparts in the latest Index: a 65.1 average score versus 63.2, respectively. That’s mostly due to differences in checkout time for B2B and B2C subscriptions (B2B is generally faster). Respondents pointed to the need for speed, shaving almost four seconds off SubCom sign-ups overall in Q4 2019 versus Q3.

Features are another major area of differentiation. Almost 98 percent of merchants in the Index have implemented mobile optimization, an increase of nearly 5 percent in one year. A great mobile CX is the price of admission into the marketplace at this point. Other high-ranking features include messaging and a wider range of plan options.

Subscribers had less love for categories like IoT/hardware, as in past Indexes. IoT/hardware remains the lowest-performing subscription type tracked, which is most likely due to a combination of lackluster feature sets and a few too many seconds spent on the registration form.

Last, but by no means least, is payment options. The number of payment options accepted by subscription services dropped from 5.5 to 5.1 between Q3 and Q4, getting farther away from the all-time high of 5.8 payment types accepted in Q2 2019. The dropping number of payment types reflects fewer alternative payments being accepted by subscription services.

Satisfied vs. Highly Satisfied

SaaS/cloud computing merchants came out on top of the latest Index by integrating social media and opt-in marketing functionality, and basically being more feature-rich than their peers in business services. IoT/hardware continues to lag, partly due to not doing those things.

The big reveal came with customer satisfaction and what it means for subscription merchants. For example, product descriptions have become nearly universal among roughly 95 percent of the services ranked – and, perhaps more importantly, customers with access to product descriptions report being about 35 percent more satisfied with their subscriptions.

End users’ love of all things “easy” came across loud and clear as they gave uniformly higher ratings to subscriptions with the features they want.

——————————

LATEST PYMNTS REPORT: B2B API TRACKER 

Social distancing has changed eCommerce from a ‘want to have’ to a ‘must have’ for businesses, yet retailers could struggle to create convenient payment and refund experiences for their apps and websites, says Abdul Raof Latiff, head of DBS Bank’s digital institutional banking group. In the April 2020 B2B API Tracker, Latiff explains how banks can provide a timely assist via application programming interfaces (APIs) that integrate payments into those eCommerce platforms.

TRENDING RIGHT NOW