Highlights from Subscription sessions: Spring edition

This year, these three metrics caught our attention.

Acquisition is down, returning subscribers are up, but our solar fraud declines.

From this, we can derive that retention is now the focus for successful brands.

So building a valuable product experience is more important than ever before.

Consumers want flexibility to use subscriptions as it feeds with their lives. Subscriptions pause usage search by sixty eight percent year over year in twenty twenty four. And finally, they want a purchasing experience they can trust.

But the learning those three things comes with a lot of challenges.

I also think with a lot of opportunity.

A lot of times people come in and they do intend to subscribe, but then they look around and they say there's actually nothing else I wanna use, or it actually turns out I'm not using it like I thought I was gonna use. So it's really important at the beginning to understand whether this is intentional. I came in to just watch one, you know, Super Bowl. Or this is an opportunity where I'm open, but I can't find my way to better content where it's really it's a product problem where you need to guide them.

You need to onboard them better. Right? So I might come in and think this is the only content I want, you know, Walking Dead. But once I'm there, I realize, oh, there's actually several programs that look interesting to me.

And then you get to a point in any good subscription where you relax and you become a member, not a consumer. You relax into the relationship and you stop looking for alternatives and you just commit to subscribing. And before then, many people, you know, put a little notation to themselves, you know, end of free trial, end of first month, remember to cancel. And And then you get to a point where you're like, I don't do that anymore because that's just part of how I live my life.

So you really want wanna do that. So the the interesting things is that I've seen though are people who've really taken the time to understand what's behind the behavior on both sides so that they can adjust their communications and potentially even the product itself, to to accommodate. So if you know that there are people that only wanna watch the Super Bowl, you charge for the Super Bowl.

Right?

And, you know, you might say you can't get a free trial during the month of the Super Bowl. You might say, hey. There's actually a Super Bowl product that you can subscribe to or you can buy. There's lots and lots of tactics that you can use once you've identified the issue. And I think too many companies don't get specific enough about what is the actual issue, what is really going on here. And so they jump to conclusions and just copy someone else's model without having first proven that that's the problem that needs to be solved.

This is a very exciting age for all of us to be in because it's the age of AI and agent ecommerce.

What you're seeing is agent ecommerce really take off with all the AI chatbots that have been launching since the chat g p t revolution.

We're really excited to see as part of payments industry as well as the commerce industry that purchase behavior is starting to change with respect to how AI chatbots are starting to do research on behalf of consumers, also act on behalf of consumers.

So this is something that we are gonna definitely see in the next year. And as it relates to subscriptions, AI will start beginning to automate subscription management, optimize renewals and discounts, and manage payments on behalf of consumers.

At PayPal, we are seeing a significant interest in agent ecommerce, and we're really excited to partner with all of you as we move commerce to the next evolutionary step.

The next two trends you probably are already, or you're already aware of, one is hyper personalization.

All consumers are starting to expect seamless experiences as they expect the software around them to know who they are and expects products to be tailored to their needs.

So we are starting to see, that, companies are also able to combine data seamlessly.

I think, you know, starting on the operational side, because that's what generally leads, the equation. You have to sort of build everything around that. But, as you're looking to scale, I think the usual suspects are, do you have the right people?

Do you have the right infrastructure or what you have to build, to get there?

Do you have the right systems in place, to be able to support, the next phase or two of growth, and how you're gonna build to that.

And so, I think those are are are some of the, topics that come up the most often, and are the most relevant. And, you know, planning ahead and and doing some scenario planning on, what, it means to scale, and going from point a to b and from b to c, what that might look like, and, what sorts of teams, infrastructure, systems, etcetera that you need in place, to be able to support, what those goals are. That's what you're trying to do.

The the the challenges you're gonna face, if you're in a scaling environment is oftentimes those things won't necessarily keep up, with the scale that, you're you're achieving. And that's, you know, I'd say that's, that's par for the course.

So More and more often, I hear that retention is new acquisition. Mhmm. Because exactly of the problem of constantly rising prices of acquisition, meta is not going getting cheaper, and, margin is not not magically getting, higher. We all we already use and, like, we like, now every company dealing with physical product will have to scramble the way how to keep the margins that where it is potentially without affecting customers.

So I would say when you acquire the customer, it is important to know why they came, what do they like about your product, and how to man maintain the relationship. So there are multiple ways. And one thing that we learned in Sandburg, at some point, we decided to apply the same model to wellness and beauty products. It didn't work out well.

So we stayed with a core audience because we we realized that's what we know how to do. We know how to sell fragrance goods. And that's why later, we started to work on diffusers. That's why later, December acquired Drift Car Freshner Company.

Right. And, like, started to invest in wall plugs and things like that. So you need to know your core audience. You need to know their story, and their relationship with your product.

Why do they choose this? And as Chris mentioned, you have to constantly improve your game because you cannot just see there and expect that people that people will come to for the same product over and over and over again. At some point, there is an exhaustion. At some point, people want to try something new.

So you need to be ahead of the game, and you need to know what offer to this, like, to this people, what to upsell, when they need to take a pause, how to bring them back. It is a lot of work for discovery, for analytics, and you need to make sure you have the right data for this.