The data point - 40% of subscribers would switch for better billing experience
Sep 25, 2022 | By PYMNTS.com
Subscription brands may be headed for a lesson in the meaning of “essential” as inflation-squeezed consumers are forced to decide between needs and wants and the holidays loom.
According to the September edition of the Subscription Commerce Tracker®, a PYMNTS and Vindicia collaboration, because so many consumers have purchased recreation or entertainment subscriptions during the COVID episode, “subscription merchants are at risk of subscriber churn. One study found that cable and satellite TV subscribers spend over $1,600 a year on channels they do not currently watch, making this an attractive area for cost cutting, especially since, as the study found, cable bills have grown 52% in the past three years.”
It’s going to end up costing some subscription brands customers, especially those whose billing practices and policies are misaligned with shifting consumer mindsets.
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What’s becoming clear to consumers as they become inflation calculus experts is that not every service they signed up for during the pandemic is going to make the cut with household budgets being squeezed on must-haves from groceries to gasoline to home energy.
Per the latest Tracker, “Consumers make a variety of monthly payments, both essential and nonessential. Recurring payments for nonessential services are at risk of being on the chopping block, with insurance payments, for example, potentially taking priority over the cable bill.”
A key strategy subscription merchants and brands are using to keep their place in the consumer mix is simplifying the recurring payment experience, giving one less reason to churn out.
We found that “as many as 40% of consumers are interested in using service providers that offer an improved billing experience, and for a substantial number of consumers, there is a willingness to switch providers to obtain this. Moreover, 23% of consumers are at least very willing to pay an extra fee to access an improved payment experience,” per the Tracker.
See it now: The Subscription Commerce Tracker®