Stop Losing Subscribers! Proven Tactics to Boost Subscription Revenue - DirectPayNet
business subscription revenue model

Stop Losing Subscribers! Proven Tactics to Boost Subscription Revenue


Gone are the days when infrequent, bundled subscriptions were the norm. The modern consumer seeks flexibility, value, and convenience, prompting a shift towards more customer-centric models.

And this extends to all types of subscriptions. Like how adobe went from offering only expensive, one-off purchases to affordable subscriptions that meet consumer needs. Or meal kits and other subscription boxes like Birchbox going from one-size-fits-all to custom sizes. It all leverages the same idea: give consumers options (but not too many).

1. Bundles: Adapting to Consumer Preferences

The evolution of consumer preferences has dramatically reshaped the approach to subscription bundles. Traditionally, businesses offered product bundles in multiples of three, six, nine, or twelve that equate with that period of time, aiming to lock in long-term commitment. While such bundles still hold value for a segment of dedicated customers, they are increasingly becoming a relic of the past for the majority.

The modern consumer is less inclined towards these elongated subscription periods. The reasons are manifold – the preference for monthly billing cycles, the desire for continuous engagement, and a general aversion to long-term financial commitments. Moreover, infrequent, bulk payments are often flagged by banks, leading to a higher incidence of declined transactions and chargebacks – a scenario no business wants to encounter.

The smarter move for businesses is to pivot towards a one-month subscription recurring basis. This not only aligns with the consumer’s financial comfort but also ensures a smoother approval process by banks. It’s a win-win: customers appreciate the flexibility and predictability of monthly charges, while businesses benefit from a steady and more predictable revenue stream.

2. Pricing Consistency: Building Trust and Value

One principle remains vital: subscription pricing consistency. The era of enticing new customers with significantly lower prices and slashing rates during holiday seasons is fading. While these tactics might yield short-term gains, they often undermine long-term customer trust and the perceived value of the product.

Today’s consumers are savvy; they are attracted to transparency and fairness in your pricing model. When the cost of a subscription suddenly doubles after an introductory period, it can lead to customer dissatisfaction and a higher churn rate. To combat this, businesses should consider offering a smaller version of their product at a lower price point. This approach allows new customers to experience the value of the product without feeling the pinch of a price hike when moving to a full subscription.

Moreover, maintaining a consistent pricing strategy throughout the year (with possible exceptions during the holiday season) stabilizes customer expectations and enhances the credibility of your brand. This consistency is also favorable in the eyes of banks and financial institutions, leading to higher approval ratios for recurring payments.

Think of how upset consumers are every time streaming services like Netflix or Amazon increase their monthly fee. It’s not just about the cost of the subscription fee, but knowing they used to have the exact same subscription product with the same functionality for less. Consistency in your pricing structure matters most.

Ensure sure your processor can handle the load!

3. Upsells: Balancing Value and Customer Satisfaction

Upselling is an art that requires a delicate balance between providing additional value and ensuring customer satisfaction. The key is to view upsells not as mere sales tactics, but as opportunities to enhance the customer experience with meaningful additions.

The traditional approach of bombarding customers with multiple low-value upsells at checkout can be counterproductive, often leading to cart abandonment and banking complications. Instead, a more refined strategy is to offer a single, high-value upsell. This upsell should complement the core subscription, adding tangible value without overshadowing it. The focus here is on quality over quantity, which will ultimately increase your cash flow.

This singular, well-curated upsell can significantly enhance the perceived value of the overall purchase, making the customer feel like they are getting a great deal. It’s not about pushing customers to spend more; it’s about offering them something genuinely beneficial that aligns with their needs and enhances their experience with your subscription offerings.

4. Long-term Customer Engagement: Beyond the Initial Sale

The true essence of a successful subscription business lies in nurturing long-term customer engagement, extending far beyond the initial sale. In the subscription economy, the longevity of customer relationships is a significant indicator of business health and sustainability.

A key strategy in fostering these enduring relationships is to offer more than just a product or subscription service. It involves creating an experience that makes customers feel uniquely valued. This can be achieved through exclusive content, personalized one-on-one sessions, special deals, or access to new products before they are released to the public. Such initiatives not only enhance the customer experience but also build a sense of belonging and customer loyalty (the CLV, Customer Lifetime Value).

Additionally, businesses must recognize the cost-effectiveness of retaining existing customers. Customer acquisition costs can be several times more expensive than retaining an existing one. Therefore, investing in customer retention strategies, such as improving product quality, providing excellent customer service, and creating a community around your brand, becomes crucial. Not to mention how SaaS (Software as a Service) automation can help streamline these tactics through metrics, forecasting, and CRMs.

By focusing on long-term engagement, businesses not only secure a steady recurring revenue stream but also turn their customer base into brand advocates. The goal is to evolve the customer relationship from a transactional one to an emotional bond, where customers see your brand as an integral part of their lifestyle.

Suffering from chargebacks? We can help!

5. Cancellations: Creating a Smooth Exit Path

An often-overlooked aspect of subscription models is the cancellation process. A smooth and respectful cancellation experience is vital for maintaining a positive brand image and potentially winning back customers in the future.

Firstly, the process should be as easy as the sign-up method. In today’s consumer-centric landscape, requiring customers to call or email to cancel can leave a lasting negative impression. The Federal Trade Commission (FTC) is increasingly emphasizing the need for ecommerce businesses to offer cancellation processes that mirror their sign-up methods. This means if a customer subscribes online, they should be able to cancel online too, and the same principle applies to other sign-up methods like phone, email, or snail mail.

Moreover, creating a cancellation funnel can be beneficial. This funnel guides customers through the cancellation process and offers them options to for subscription management, like downgrading to a cheaper option or pausing it. This approach not only provides flexibility but also gathers valuable feedback that can be used to improve services and reduce future cancellations.

Remember, a customer who cancels isn’t necessarily lost forever. Handling cancellations with care and respect can leave the door open for their return, and it demonstrates your commitment to customer satisfaction, even when they’re leaving.

Building a Future-Proof Subscription Business

As we’ve explored the various facets of the subscription business model, it’s clear that success in this domain requires more than just a great product or service. It demands a deep understanding of customer preferences, a commitment to consistent and fair pricing, thoughtful upselling and cross-selling strategies, a focus on long-term customer engagement, and a respectful approach to cancellations.

Embracing these strategies will not only help in adapting to the ever-evolving subscription economy but also in building a robust and resilient subscription revenue model. The key is to prioritize customer experience and satisfaction at every step of the subscription journey, from sign-up to cancellation and beyond.

To truly excel in the subscription-based business model space, however, you need a reliable and efficient payment processing partner. This is where DirectPayNet comes in. We specialize in providing merchant accounts tailored specifically for subscription-based providers. With DirectPayNet, you can ensure smooth, secure, and seamless transactions, enhancing both your operational efficiency and customer satisfaction.

Take the first step towards a future-proof subscription business. Open your subscription merchant account with DirectPayNet today and unlock the full potential of your subscription model.


About the author

As President of DirectPayNet, I make it my mission to help merchants find the best payment solutions for their online business, especially if they are categorized as high-risk merchants. I help setup localized payments modes and have tons of other tricks to increase sales! Prior to starting DirectPayNet, I was a Director at MANSEF Inc. (now known as MindGeek), where I led a team dedicated to managing merchant accounts for hundreds of product lines as well as customer service and secondary revenue sources. I am an avid traveler, conference speaker and love to attend any event that allows me to learn about technology. I am fascinated by anything related to digital currency especially Bitcoin and the Blockchain.