April 2, 2020 | Authored by: Jesus Luzardo
It’s a new world – how is the subscription industry responding?
The current crisis has disrupted virtually every aspect of day-to-day life. People have quarantined themselves within their homes, businesses have closed up shop, thousands are working from home, and millions have suddenly found themselves out of work.
In these trying times, subscription businesses need to ask themselves what their responsibility is to their customers. Do they suspend payments? Offer free subscriptions? How do they stay connected with their subscriber base during these times? These would be tough decisions to make under normal circumstances, but with revenue down across the board, subscription businesses may be hesitant to give away or reduce the fees for their services.
Industry expert Robbie Kellman Baxter, author of the upcoming book ‘The Forever Transaction’, recently weighed in on this topic, stating that extraordinary times require extraordinary measures. She believes that subscription businesses owe a social responsibility to customers and their communities.
“Now is the perfect time to take a quick step back, refocus on your forever promise, and launch a strategy that will carry you through these tough times,” Baxter says. “And maybe even strengthen your relationships along the way.”
Here at Vindicia, we wholeheartedly agree with Baxter’s view. People are struggling, most are facing uncertainty, and anything subscription businesses can do to help alleviate their concerns is welcome. Subscription businesses can act with compassion and empathy, doing their part to ease the financial strain created by this crisis. It’s the right thing to do for both your customers and your business.
Follow the lead of top subscription businesses
Leading companies across the industry have embraced social responsibility during this crisis. Here are several examples for other businesses to draw inspiration from:
- Zoom is one of the rare business success stories during the coronavirus pandemic, becoming the go-to video conferencing app for quarantined individuals to stay in contact with family, friends, and colleagues. The company has gone above and beyond, offering free services to K-12 schools.
- New Zealand-based Spark Sport, a Vindicia client, recently announced that it would provide free access to its sports media platform through at least the month of April. This offer is available to current customers, suspended accounts, and new users.
- In the telecom space, Bell Media will give new customers an extended free 30-day subscription to the Crave streaming service in Canada. With so many people quarantined in their homes, complimentary access to a curated media platform should be well received.
- Peloton is offering free access to its app, with several options to keep up with fitness routines while maintaining social distancing.
In each case, these companies are forgoing short-term profits for long-term revenue. It may be a bitter pill to swallow, but it’s absolutely the right move.
Stay connected with your subscribers today for loyal customers tomorrow
Subscription businesses will take a financial hit if they temporarily give away or reduced their subscription fees, but there are long-term benefits to consider. Offering extended trials or free subscriptions during the crisis will bring in new customers, increase brand awareness and build customer loyalty. Also, many consumers will appreciate even more the value of accessing their subscription services during this time. Users are unlikely to forget that in their time of need, you were willing to help them out.
Once the crisis passes, and it will pass, those new customers may stick around and switch to paid subscriptions.
That same mindset should apply to retention strategies. Give customers the flexibility to suspend accounts, defer payments and pause subscriptions. People are tightening their belts and shedding everything but the most vital services, but when you self-isolate from the rest of the physical world, digital subscription services are extremely helpful to stay connected and mitigate the changes in your day-to-day life.
Some voluntary churn is inevitable, but managing passive churn, for those customers who want to continue the great recurring subscription relationship with your business, is critical. Always leave the door open for customers to come back once life returns to normal. It’s better to lose out on a few months of revenue than a subscriber’s entire customer lifetime value.
How Vindicia is supporting social responsibility
Vindicia’s recurring billing and retention platform are intentionally designed for subscription businesses, so companies can suspend payments, pause subscriptions and add free promotions with ease, as well as managing the passive churn to eliminate additional headaches to your subscribers who are most likely concerned about other aspects of their life.
You can experiment with different payment plans as well as retention strategies that appeal to beleaguered customers while protecting your brand and your long-term value. Use real-time customer data and insights to guide your decisions and find the right approach for your customer base. We give you everything you need to tweak your subscription and retention strategy for the best results.
We’re all in this together, and a little compassion goes a long way. Do the right thing and lend your customers a helping hand. We are willing to help our customers navigate through these challenging times.
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