Loyal Subscribers Account for Nearly 80% of Subscription Merchant Revenue

woman online shopping

In the highly competitive world of retail subscription commerce, winning over loyal customers is crucial for providers to secure a lion’s share of revenue.

In “How Retail Subscription Merchants Can Win and Retain High LTV Customers,” PYMNTS Intelligence draws on a survey of nearly 2,100 customers to examine the relationship between loyal customers and merchant revenues and the best practices to expand this lucrative group of customers.

Findings captured in the study done jointly by PYMNTS and sticky.io show that loyal customers make up 30% of consumers and are the cornerstone of retail subscription commerce. These customers have a high lifetime value (LTV), spending an average of $65 per month on their subscriptions and maintaining them for an average of 30 months, resulting in a projected LTV of over $2,500.

subscription customers and revenue chart

The survey also identified three key customer segments: loyalists, persuadables and short-timers, with loyalists accounting for nearly 80% of revenues, highlighting their importance to providers.

The study further revealed the top five reasons that would cause loyal subscribers to cancel their subscriptions: discontinuation of free shipping, refusal to refund disliked products, excessive promotional materials, automatic subscription renewals without customer consent and poor customer service.

To attract and retain these loyalists, retail subscription merchants will need to take these issues into account and focus on providing essential features that matter most to this customer segment.

These include the top three features that loyalists value the most — guarantees or refunds, the ability to change product selections, and the ability to pause services. By offering these features, merchants can differentiate themselves from competitors and enhance customer satisfaction.

Moreover, providers that offer subscribers the ability to make changes to their subscriptions, such as pausing services or adjusting product selections can attract more loyal customers and boost sales.

Overall, winning over loyal customers is vital for retail subscription merchants to secure a significant portion of revenue. By understanding their demands, providing essential features, and delivering a positive customer experience, retail subscription merchants can attract and retain high LTV customers.