Subscription management is a vast and highly technical topic that includes all the various ways that you handle your customers’ orders—from recurring payment processing to order adjustments. Get subscription management right, and you create positive customer experiences that keep subscribers with your business in the long term. But fall short, and your customers may churn before you benefit from their true value.
Read on to learn a few surprising facts about subscription management that you can use to inform your own business strategy. Looking for tools to help you select the best subscription management software for your business? Read our interactive ebook, A Merchant’s Guide to Subscription Management.
- Subscription management involves all the ways that you manage your customers’ recurring orders—including the ways that you empower them to adjust their own subscriptions.
- As inflation rises, customers require the ability to reduce their spending, particularly through actions like order skips.
- Today’s subscribers want the flexibility to adjust their orders from any location via their mobile devices, making transactional SMS a key subscription management strategy.
4 things you might not have known about subscription management
1. Order skips are on the rise
When subscriptions are flexible and easy to modify, new customers are more likely to commit, and existing ones are more likely to return. This makes it especially important to enable your customers to make subscription modifications themselves, like product swaps, frequency changes, and order skips.
That last one, the ability to skip an order, may be particularly wise to focus on in the coming years. Research from our 2023 State of Subscription Commerce report found that among subscribers who adjusted their orders in 2022, an average of 39% skipped an order—a substantial increase from 2021.
Why might this be? Some studies indicate that in today’s economic climate, the modifications customers can make to lower their spending when needed are more important than ever. A survey by McKinsey showed that in 2022, nearly three-fourths of respondents took actions to reduce their spending such as changing brands, delaying orders, and reducing order quantities.
The bottom line for your business? Don’t be afraid to empower your customers to spend less with you. In fact, building this idea into your subscription management strategy may actually instill deeper trust and loyalty in your brand that keeps subscribers with your business for longer.
2. Transactional SMS can increase LTV by up to 30%
Along with flexibility, today’s consumers require independence. They want to be able to quickly and easily adjust their orders wherever they are that day—whether that’s sitting in front of a laptop or standing in line at the grocery store.
That’s where transactional SMS comes in. In the past, your customers may have had to log on to your website or email your Support team from a desktop computer. Today, most individuals have a direct line to you right in their pockets through their mobile devices.
With transactional SMS, it’s not just that subscribers don’t have to be sitting in front of a computer to adjust their orders. This strategy enables them to make changes to their subscriptions without even having to log on to a customer portal, instead making updates with a quick text message.
The result? Wherever they are, customers can easily and quickly add products to their order, skip a delivery if they have too many of your products, or swap product variants to get exactly what they need that week. This powerful subscription management tactic leads to better shopping experiences that reduce friction and churn, and can increase LTV by up to 30%.
3. Curation is critical
One key way that you can add value for your subscribers is through curation. By assembling groups of products or providing personalized product recommendations, you save them time sifting through your website and introduce them to exciting offerings they may not have discovered otherwise.
According to research by Accenture, 91% of consumers are more likely to shop with businesses that recognize and remember them, and provide them with relevant offers and recommendations.
The key word here is “relevant.” To establish credibility and trust in your curation expertise, be sure to tailor your cross-selling and upselling efforts. For example, you can segment your customer base into groups with similar traits to provide them with the most compelling offers, or recommend products based on individual customers’ previous order history.
Be sure, too, that customers can easily find your recommendations. That often means placing cross-selling and upselling opportunities at various points in the customer journey, including in the customer portal, via transactional SMS, and on key product pages.
4. Customers have low patience for bad experiences
No matter how much you empower your customers to manage their own subscriptions, there will always be circumstances where a subscriber needs to contact your Support team. These opportunities are especially important to turn a potentially negative experience into a positive one.
PWC’s consumer experience report found that 59% of customers in the US will walk away after several bad experiences, and 17% will walk away after just one bad experience.
By the time a customer engages your Support team, they may already be confused, frustrated, and at risk of churning. But by solving their problems quickly and efficiently, you can secure their loyalty and prevent voluntary churn.
Investing in your Support team is crucial—be sure to provide them with the tools and resources they need to meet the needs of your customers. It can also help to provide customers with a few options to reach your Support team, such as through chat, email, or phone.
Finally, your subscription management solution should make it easy for your team to manage customers’ orders in bulk or individually straight from the merchant portal. This can save both your customers and your business valuable time solving issues.
Looking to get started with a subscription management solution?
Finding a subscription management solution can help take the guesswork out of this key process for your business, saving you time and money and reducing the lift on your Support team. Curious about how to find the right provider for your business? Read our interactive guide to subscription management today.