Sharath Dorbala, CEO of Vindicia, discusses how subscription services must reach the next level in order to continue growing in the post-pandemic world. “With the subscription industry flourishing despite the pandemic, there’s more opportunity than ever to find complementary services across the subscription ecosystem that can enhance a company’s offering and stand out from the crowd,” says Dorbala in “A Look Forward: What Executives Wish for America and the World in 2021. Read on for his three major bundling categories to help drive recurring revenue.
Subscription services have proven resilient in the face of the pandemic. However, as we get ready for 2021 and a post-pandemic world, the secret to continued growth is in taking subscriptions to the next level. Three trends will help subscription businesses meet these goals: bundling, enhancing the user experience and redoubled customer retention efforts. The recurring revenue bundle is one of the most powerful trends to achieve growth. While it’s been a timeless strategy, over the past year businesses have increasingly latched onto the power of bundling in driving brand affinity, customer growth and retention. There are three major bundling categories:
With the subscription industry flourishing despite the pandemic, there’s more opportunity than ever to find complementary services across the subscription ecosystem that can enhance a company’s offering and stand out from the crowd.
Another important 2021 trend will be an increased emphasis on the customer experience, providing a seamless, easy to manage and personalized journey at every step. That means treating each individual user attached to a subscription as a separate person with their own preferences and expectations.
To deliver that kind of experience, companies must go beyond the traditional approach to identity, which has been focused on usernames and passwords. They need to assign individual users their own digital identity and help them manage it across the entire service. That way, subscriptions can continually personalize the experience for each user — curating content according to profile information and activity history, for instance — increasing their stickiness and preventing churn. Speaking of churn, a continued emphasis on customer retention is a must for growth through 2021.
Every subscription business faces churn as a major obstacle to growth. Many businesses are focused on combating active churn when a customer makes the decision to leave on their own accord. However, reducing passive churn — which is when an account is terminated unwillingly because of payment failure — is a different story. Despite the efforts in experience enhancements that address active churn, many are less equipped to deal with passive churn. This is because the risk is not well understood, or businesses are not leveraging available tools to successfully deal with passive churn. When addressed with the right approach, reducing passive churn can result in an immediate increase in monthly revenues.
In summary, bundled subscriptions, enhanced user experience and increased customer retention strategies can help subscription businesses succeed in the coming year.