5 Considerations for a Subscription Model

In my previous post on modeling a subscription business, I had mentioned acquisition and retention modeling of subscriber business. Here are a few factors to investigate and consider, as we go about creating a sustainable subscription based product/service portfolio. 

1. Focus on quality acquisition – do your research on what will be a good take rate for the product among your target base. Do not over-sell it – sales channels are prone to doing that.
2. Reinforce Price to value – this falls in the same league as product life. We need to make sure that the price per month is relevant and the product value is continuously emphasized in customer’s mind. Pricing may need adjustments, as markets change and technologies evolve. Keep the customer apprised of such changes and emphasize the value - always! 
3. Continuously measure product engagement – how frequently is the product used? The more a customer engages with the product, the better – this is to reinforce the value your product offers that is relevant to customer need. Further, how easy is it to switch? If there are switching costs, customer decides for you, but if these are manageable (for customer), it becomes imperative that we keep the customer engaged and away from the competitor offers.
4. Tackle the 0-90 day churn head-on. Buyer’s remorse is most pronounced within the first 90 days of the purchase. Keep the product relevant and incentivize the customer to stay on. Listen to your sales channels, customer support and customer surveys for continuous feedback. However, the churn curve will be always at its peak during this period, so make sure to take the higher churn into account, when modeling for subscribers or revenue projections.
5. Strive to be an engaging brand – don’t forget the acquired customer and let them drift towards the retention category. Engage with them through updates, enhancements, thank you notes, newsletters, etc. Whatever works and is relevant, for developing a culture of subtle brand reinforcement in customer minds. These engaged and happy customers are your currency.

Subscriber growth modeling can be refined if due attention is paid to the above parameters and the teams are aligned to engage the customers as outlined above. Forecasting growth and performance, in turn, becomes lot more rewarding, literally!