The subscription business model is steadily rising. From subscription boxes to streaming services, companies are turning toward this business model as there’s an added benefit of predictable, recurring revenues and the ability to secure a loyal customer base. 

However, in the era of abundant choices and constant connectivity, many consumers face a dilemma: subscription fatigue. As the industry becomes increasingly crowded and price increases in video streaming services continue, subscription fatigue and its resulting churn emerge as a natural consequence.

In this blog post, we’ll walk through what subscription fatigue means, its three main causes, and how subscription brands like yours can prevent it.

What is subscription fatigue?

Subscription fatigue, also known as subscription overload or saturation, refers to the potential decline in consumers' interest in recurring services as the number of available choices increases.

This concept is tightly related to customer churn–the amount of subscribers that cancel a subscription. Generally, churn from subscription fatigue can be attributed to three reasons:

  • Subscribers feel they don’t get enough value: If customers perceive a lack of value, they don’t hesitate to explore other options–especially in entertainment subscriptions. Interestingly, value isn’t restricted to the price tag but the entire experience when transacting with a brand. 

  • Subscribers perceive poor customer service: Buyers are spoiled by choice and unwilling to settle for anything below what they consider best. Poor customer service is one of the most prominent causes of churn, and businesses lose over $75 billion annually due to not attending to their customers well enough. 

  • Subscribers aren’t loyal to your brand: The problem arises whenever a subscriber views the brand as “interchangeable” with a competitor. According to Havas, 75% of brands could disappear, and nobody would care. This points toward the pressing issue of customer loyalty in today’s marketplace and explains the growing industry concern over churn.

Signs of subscription fatigue and how to prevent them

An ideal approach to fighting churn in subscriptions lies in identifying the signs of fatigue early on, along with the different drivers of churn, and accordingly undertaking the necessary steps. Some common causes and actionable solutions are:

Inability to demonstrate subscription value

Any customer buys an annual or monthly subscription to achieve a particular outcome. If your offering fails to make customers feel it adds significant value to their lives, fatigue and churn can emerge. Sometimes, it can result from customers simply not knowing how to use the key features of your product or service and, therefore, feeling that it’s not of good value to them.

Solution: Outline your ideal customer profile and work towards explicitly providing them with a stellar subscription service combined with an excellent customer experience. Simultaneously, you must plug in efforts to communicate your value proposition clearly and live up to what you preach. If that implies making your existing onboarding process more robust, you need to do it along with providing excellent after-sales support.

Failure to adapt to changing customer preferences

Many subscription brands often fail to incorporate that market intelligence into their offerings and suffer the brunt of competitors poaching their customers. For instance, customers may start losing interest in your offering or undergo a lifestyle change that makes it irrelevant to them. In such cases, failure to be attentive and introduce measures on time can leave you vulnerable to avoidable churn. 

Solution: To identify and respond to changing customer preferences, you need to collect enough customer data and study it deeply. Leverage that understanding to stay close to them and ensure they’re excited and engaged with interesting campaigns through social media, in-app communication, and emails. Monitor their behavior closely and respond to signs of reducing activity with emotional messaging that re-ignites their aspiration. The idea is to make them hit pause instead of canceling the subscription. 

Offering rigid pricing and billing plans

Even though the price is not the sole influencer in driving purchases, it is still critical. Unless your business provides meaningful pricing options to customers, they are always at risk of exercising the option to withdraw the subscription at any point in time. Moreover, as consumers turn cost-conscious with the increasing number of overall subscriptions to spend on, offering a competitive deal helps.

Solution: An excellent way to tackle pricing-related churn in your subscriptions is by empowering customers with flexible pricing plans instead of selling one product or service at a flat price. Doing so ensures they have little reason to drop out or switch to a more flexible service. Additionally, revisiting your pricing from time to time is also essential to stay relevant.

Payment processing failures 

Churn can be involuntary due to payment failure due to an expired credit card, a change in the customer’s banking details, or insufficient funds. Unfortunately, many subscription companies have little know-how to control involuntary churn. As a result, they lose the chance to sell directly without engaging intermediaries, even if the end customers are eager to use their products. 

Solution: You can effectively arrest involuntary churn by using robust, secure subscription management and billing platforms like Recurly, which has features that allow updating accounts, automatic retries in case of payment failure, and more. Furthermore, by introducing dunning campaigns, you can also request your customers to update their payment methods in a timely manner and cancel out involuntary dropouts by a large fraction.

Let’s get started: Stop subscription fatigue

Like in any subscription model, customer churn arising from fatigue is inevitable. Understanding the causes and implications of subscription overload in your business can help you implement the right prevention strategies.

Recurring billing and management platforms like Recurly help you identify saturation signs early and offer many features and tools to reduce it, such as flexible subscription plans or pause options.

Want to learn how we’ve helped subscription brands like yours to reduce churn and prevent fatigue? Check out Recurly churn management capabilities.