Subscription Commerce

How Merchants Can Reverse The Subscription Churn Curse

In many ways, consumers are living in a golden age of subscription commerce, with streaming services like Netflix offering award-winning series’ and movies, while Amazon Prime provides members with access to a growing bundle of content and services.

These prominent platforms are raising the bar of consumer expec
tations at a time when the subscription commerce market as a whole is getting more crowded, with providers offering meal kits, wardrobe boxes and myriad other products. Yet, many of these providers do not seem to realize that consumers expect more from their subscriptions these days – and they have little patience for subpar service.

This is among the key findings of the Q2 2019 Subscription Commerce Conversion Index: The Evolving Subscription Marketplace, a quarterly assessment by PYMNTS, in collaboration with Recurly, of more than 160 businesses based on 47 key features. These features include registration time, billing and product reviews. This edition also offers insights from a survey of more than 2,100 consumers, with a special focus on their attitudes toward digital media and streaming services.

Our research shows that there is a widening gap between leading subscription providers and the rest of the pack. According to the Index, Middle Performers, which make up 76 percent of the sample, saw their index scores decline, from 63.5 in Q1 2019 to 63.2 in in Q2, continuing a downward trend since 2017. Meanwhile, the top 20 providers improved their scores, earning 82.8 in Q2 2019, up from 80.3 in Q1.

The pressures facing subscription-based services are clearly demonstrated in two of the largest segments of the market: streaming content, including platforms like Netflix and Hulu, and digital media, which includes services like Audible and digital editions of newspapers and magazines. According to our research, 26.7 percent of digital media subscribers and 7.3 percent of streaming subscribers plan to terminate their subscriptions within a year.

These disenchanted subscribers’ concerns come down to cost and value. More than 30 percent of streaming subscribers who plan to cancel their accounts say they either can’t afford their plans or that they are not worth it. These are also the leading factors driving subscription abandonment for digital media subscribers.

In this climate, consumers are acutely aware of any shortcomings in the experience subscription services offer. Those that have subpar experiences registering and using digital content platforms are more likely to cancel their accounts. For example, 42.4 percent of those planning to cancel their streaming subscriptions considered their registration experience “somewhat easy” at best, compared to 11.7 percent of those who plan to keep their subscriptions.

To learn more about how subscription-based services can win the loyalty of members in this crowded market, download the report.



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