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“Subscriber Experience” at the Heart of Recurring Revenue Success

Michael Fauscette
Advisor, G2

What makes for a good subscriber experience?

To answer this question, you first have to understand what the subscriber experience is. In short, it’s the ongoing interaction between a subscriber and a vendor. The key word is “ongoing.” These ongoing interactions include everything that might impact the perceived value a customer gets from your products/services — from the experience of signing up for your offerings to the invoices they receive for products/services rendered, the communications they have with your customer success team, subscribers making changes to existing subscriptions, and more. For B2B companies — with their feature rich nature of frequent release cycles, ease of deployment, and anywhere/anytime access to cloud-based solutions — subscription models are a natural fit. But this model is more than just a tech shift. It’s more than just a shift from products to services, from hardware to hardware-as-a-service. It’s a culture shift that needs to be wrapped around subscribers.

Meeting New Customer Expectations

Customer expectations are high for consumer services, especially for digital experiences. The concept of — and demand for — instant results is deeply ingrained within the modern consumer. The ability to access information, do research, buy nearly anything and seamlessly communicate across multiple channels online has permanently altered what consumers expect from digital experiences. We purchase online and expect same day delivery and access to everything, from cloud storage services to groceries and air filters. In 2020, as communities went into lockdown to attempt to control the Covid-19 pandemic, our dependence on the instant nature of the internet experience became even more prominent and important. And this trend has only continued to put pressure on how businesses approach and optimize for the subscriber experience.

Companies That Fail to Deliver on the Subscriber Experience

Getting what you want, when you want it, how you want it defines a superior subscriber experience. But right now, many companies are failing to deliver. According to a recent study by the management consulting firm Bain and Co, 80% of CEOs believe they deliver a superior experience, but only 8% of customers agree. And this disconnect has obvious negative consequences: according to a study by consulting firm PwC, 32% of all customers would stop doing business with a brand they loved after one bad experience. With 70% of a subscription company’s revenue comes from existing customers through upsells, add-ons, and renewals, retention — not just new customer acquisition — that means that ensuring a quality subscriber experience is table stakes for growth.

Subscriber Experience Does NOT Equal Customer Service

Some businesses may conflate subscriber experience with customer service. In other words, the perception is that the subscriber experience depends on the interactions subscribers have with your customer service team to resolve issues quickly. This is, of course, one component of the subscriber experience, but the subscriber experience extends far beyond customer service. For illustration, in a study conducted by Pega, the most important aspect of customer service — according to customers, employees, and business leaders — was identified as “Quick resolution of the issue.” This could mean that a customer service representative was easily able to resolve a customer issue. But it could also mean that the customer had the necessary tools to solve for the issue himself. Subscribers want the ability to resolve issues and just self-manage their subscription generally. And data shows that the more subscribers interact with and amend their subscriptions, the greater the impact on a company’s revenue growth. According to a recent Subscribed Institute benchmark on subscription changes, in 2015, only 30% of subscriptions had a change after the initial sign-up. Today, 60% (out of 90M subscriptions that were looked at for the report) had at least one change after sign up — and for companies that average one change per subscription, the growth rate almost triples from the baseline to 28% YoY growth.

The Birth of Customer Success

The best subscriber experience offers self-service that is feature rich, easy, quick and accurate. Self-service that is robust also ensures that the resolution to most issues is quick and the response is often immediate. That’s why the traditional concept of customer service has been expanded in recent years into an entirely new function: customer success. Customer success isn’t relegated to one team with the responsibility for responding to email complaints. Customer success spans across product, sales, marketing, and more to ensure that subscribers are getting optimum value from your offerings.

The Technology Backbone for a Good Subscriber Experience

From a technical perspective, a good user interface is one aspect of a good subscriber experience — but it is more than UI. From a system perspective managing the subscriber experience encompasses both the front end UI and the underlying orchestration of processes that support these ongoing interactions between subscribers and a vendor. A seamless subscriber experience requires that the process engine be integrated across the complete subscription lifecycle from configuring and placing an order, sending accurate invoices, and making subscription changes to renewing the relationship. Automation is a key feature in avoiding the need for manual interventions as well as reducing errors caused by these manual interventions. Your underlying systems must provide the capability to support the required process flexibility or the subscriber experience will suffer along with your net dollar retention (NDR).

Subscriber Experience, Engagement, and Value

The idea of “ongoing interactions” is really at the heart of the subscriber experience. Subscriptions aren’t one-off transactions. The sale happens not only every billing cycle, but, in a sense, the sale happens every time the subscriber engages with your offering. Now more than ever businesses must consider subscriber experience to ensure that they are meeting customer expectations to increase retention. You can’t create engagement — the customer is in control of when, where, and how to interact with your company. But you can provide an experience that can lead to engagement. You can provide a high-level of control to your customers to give them the best possible digital experience. And when businesses optimize the subscriber experience, providing customers with flexibility and value, that’s when businesses thrive alongside their customers.

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