Let's talk


December 12, 2022 | Authored by: Jesus Luzardo

2023: The year of recurring revenue

We are living in interesting times.

The relationship between brands and consumers continues to evolve. Forget the simple “buy and sell.” It’s not even about making sure that customers come back and buy again. We’ve moved beyond that now. Today, consumers want to sign up and pay up so they can stay connected to the brands, products and services they love, without having to think about it. More companies than ever are focusing their energies on providing frictionless experiences to customers, and in return, they get the promise of recurring revenues.

In short, the world is turning to subscriptions and memberships.

A solid solution for several problems

The beauty of subscriptions – and why they are proven time and again to be the future of commerce – is that they address and solve some key pain points. Both for consumers and companies.

For consumers, a good subscription is one that keeps them connected 24/7 to the product or service, so they can access the things they want, whenever they need. Whether it’s streaming their favorite music or content, or receiving their monthly box of shaving supplies, a subscription is magical – the customer does not need to put in any thought or effort. It’s just there.

For companies, the subscription model is an effective way to maintain relationships with customers over time. A subscription is not a one-time purchase – it’s a recurrent commitment from the customer. With subscriptions, the focus shifts from acquisition to retention to extend the lifetime value of each subscriber. And as we all know, it is far cheaper to retain an existing customer than acquire a new one.

Happy New Year of recurring revenue

In times of economic uncertainty, consumers become more sensitive to cost. They cut back on non-essential items, particularly if the payoff is not perceived as being worth it.

Subscriptions can overcome this, and that’s why we believe that 2023 will be the year of recurring revenue. The subscription mindset is already well-ingrained in the consumer landscape. There will be starts and stops, upsets and coughs, but the road to revenue is clear.

How to unlock the revenue potential

At the cusp of a new year, the challenges that companies face are enormous. The world is still reeling from the pandemic, inflation continues to rise, and chatter about recession has not let up.

Through all this, subscriptions enable companies to engage and delight customers on an ongoing basis. This is very powerful to make them stick around.

With the right subscription tech stack, companies can provide their subscribers with seamless experiences, including frictionless payments that do not leave any room for the customer to consider canceling or dropping off.

Here’s an example: a customer subscribes to a health food brand for a weekly box of healthy snacks delivered to their door. Sure, it’s a “non-essential” purchase. But on the other hand, the customer places great value on eating healthy. As the cost of living gets higher, the customer feels a certain internal tension as to whether to continue the subscription relationship.

Imagine that the customer’s credit card payment fails, and there was no automatic fix to this issue. The customer passively churns. But they had some doubts already, so when the sales rep calls to get the new credit card information and sign them up again, it is all too easy for the customer to stay unsubscribed.

Now imagine that same scenario, however the company uses Vindicia Retain as part of their subscription operations. Retain “heals” the failed payment transaction and re-captures the payment, before the company is in need to contact the consumer to address the problem with the failed payment, and the subscription continues smoothly. This seamless and pleasant interaction creates a sense that the customer is cared for and appreciated. They don’t need to quibble over the subscription or price, because they feel the value of being a signed-up customer.

In 2023, help them commit to you

When a customer subscribes to a company, they are in the mindset to commit. In return, the company must make good on the relationship.

By focusing on engagement and retention, and by using strategic tools like Retain, subscription companies can provide the seamless experiences that help customers stay committed. What’s more, your company stays a step ahead. Instead of investing precious financial resources in a call center trying to win back lost customers, you won't lose them in the first place.

And that’s the key to recurring revenues in 2023. Happy New Year!

About Author

Jesus Luzardo

Jesus Luzardo

Jesus Luzardo is VP, Global Head of Sales at Vindicia. As an international technology industry veteran, Jesus brings over 30 years of experience in commercial, marketing, strategy, operations and technology roles. Prior to Vindicia, Jesus was Head of Marketing for Amdocs in the Caribbean and Latin America region, driving marketing to significantly expand Amdocs’ sales pipeline. Before Amdocs, he was Head of Sales for Utiba (acquired by Amdocs in 2014), focusing on mobile financial services. His experience includes two years as Head of Corporate/B2B and CCO at Cable & Wireless, and 15 years with Motorola. He lives by Vince Lombardi’s motto: “Perfection is not attainable, but if we chase perfection we can catch excellence.” Jesus holds an MBA from Universidad del Zulia (Venezuela), a B.S. in Electronic Engineering from Universidad Rafael Urdaneta (Venezuela), and Advanced Management certifications from Kellogg Institute of Management and IESE (Universidad de Navarra, Spain).