Automation & tech stack are indispensable for subscription growth in 2024
Subscription services continue to prevail, and the importance of automation and a flexible technological infrastructure cannot be overstated. As companies work to meet the evolving needs of their customers, the role of advanced technology becomes crucial to improve retention.
From onboarding to customized billing, payment processing, and plan management, the success of the subscriber lifecycle hinges on flexible subscription management–and the numbers prove it. Our 2024 State of Subscriptions report shares the latest benchmarks of over 2,000 subscription brands and more than 58 million unique subscribers. Here’s what we’ve found.
Flexibility in pricing and packaging boosts sign-ups
Today, customization options such as free trials and add-on options have become effective ways to acquire and retain customers. In fact, 75% of consumers say they are more likely to subscribe if a free trial is offered.
Recurly merchants that take advantage of these effective tools have reached a median trial-to-paid conversion rate of 50.0% and collectively earned $2.2 billion in incremental revenue from add-ons alone in 2023.
The economic climate changes at a daily speed, and so do subscriber preferences. Having the means to respond and quickly adapt to them is what separates successful businesses from their competitors.
Seamless payment processing improves customer retention
Payments are an essential part of the subscriber experience. As subscribers seek convenience and security, offering a diverse catalog of payment alternatives and currencies that cater to their specific needs and preferences is a key factor in scalability.
While debit (45.5%) and credit cards (33.0%) continue to reign as the top choices for consumers, the inclusion of alternative payment methods simplifies the checkout process for consumers and boosts conversion rates for merchants–especially in the direct-to-consumer space.
As companies expand into new markets, diversifying currency offerings enables them to accommodate the demands of global audiences. Last year, 11.1% of businesses offered three or more currencies at checkout, and among the merchants with greater than $10M in TPV, approximately 19% offered three or more currencies.
The inclusion of these new customization options calls for robust payment orchestration with multi-gateway and multi-payment strategies to deliver frictionless experiences.
Machine learning helps recover more at-risk subscribers
As subscription businesses continue to proactively fight churn, a foundation of credit card updaters, dunning campaigns, and AI-powered transaction retry models is indispensable. The combination of these revenue recovery tools has helped Recurly’s customers save up to 72.0% of at-risk subscribers and recover $254 million in revenue from dunning emails.
Recurring billing systems free your financial team from the manual and costly burden of time-intensive, error-prone accounting processes, while the automation of systems gives you the confidence to grow without bounds.
The ever-changing economic climate demands that companies adapt their financial strategies to remain resilient and agile. With the freedom to innovate and enhance your product or service, you can grow your business faster, smarter, and stronger.
Benchmarks and industry trends give you a bigger picture of the shift in subscriber preferences–and how companies are responding to them. Grab your copy of Recurly’s 2024 State of Subscriptions report to get more insights and predictions of where the industry is heading.