How SoundCloud achieves global growth by delivering subscriber value
Accurate tax calculations and localised compliance are essential for subscription brands seeking global expansion. Although just one part of the expansion puzzle, neglecting these elements can create great challenges when scaling operations on an international level.
Professionals in this space can find invaluable resources at the Vertex Exchange Europe 2023 conference, hosted on the 9th of May, at the Hotel Sofia Barcelona. The Vertex events have become a resource for professionals looking to stay ahead of industry trends and learn about the latest technology tax solutions and trends.
During the conference, Hannah Wheeldon, Recurly's EMEA Customer Strategic Success Manager, Thomas Silberbaue, and Joao Trento, Accounting and Tax Manager SoundCloud provided valuable insights on achieving maximum subscriber value by implementing efficient tax compliance and billing processes.
It’s all about customer journey optimisation
Understanding the subscriber journey is key for brands to create a positive customer experience, retain more users, and increase revenue through upselling and cross-selling opportunities. Let’s review what subscription businesses should consider when designing or optimising their journeys.
1. Flexible plans and pricing models
More than just a benefit, personalisation has become a core component in subscriptions. And to successfully deliver personalised experiences, you must be flexible–in plans, pricing models, payment and billing cadences, and product features.
Consider offering users multiple plans or tiers; highlight each plan’s benefits and allow them to subscribe only to their preferred one.
Free trial periods are effective acquisition drivers; let cautious customers test out your product before financially committing.
Consider convenient billing terms, and offer monthly and annual options to gain the widest reach to your audience.
2. Payment method alternatives
According to Checkout.com, 56% of consumers would be permanently put off shopping on a site if they couldn’t use their preferred payment method. The message is clear: payments have become a growth opportunity in subscriptions.
Make the process of paying as easy as possible. Besides credit and debit cards, Alternative Payment Methods (APMs) continue to gain traction. In fact, PayPal is the most popular APM, accounting for 18% of all transactions and 92% of APM transactions within Recurly.
Consumers expect and demand choices when paying for their subscription services–it’s part of the convenience they constantly seek. A mix of several payment options and a thoughtful payment experience increase conversion options.
3. Compliance and protection
Collecting and storing client data must be done with extreme caution, as information is crucial not only for payment purposes but also for tax compliance matters. You want to ensure that ZIP and postal codes, email addresses, and tax IDs are collected and protected during the entire subscription process.
4. Customers who turn into fans
Did you know? Nearly 70% of consumers want to give and receive gift subscriptions. Advocacy is crucial for subscription services to retain and attract new customers, increase revenue, improve the user experience, and build brand loyalty.
Here are three ideas you can consider when working on your advocacy strategy:
Referral codes: Empower your subscribers to become brand advocates, providing referral codes to share with friends and family.
Gift cards and gift subscriptions: Equally, providing customers the option to gift a subscription is a great way for current customers to promote your product.
Loyalty programs: Loyal subscribers are the lifeblood of any subscription business–show how much you value your long-term subscribers by offering discounts.
The perfect blend of promotions and gift options creates a robust acquisition strategy that taps into subscribers’ ever-changing preferences. Make sure you’re also leveraging your fans to drive these efforts.
5. Fighting and preventing churn
Churn is a fact of life for every subscription business. However, understanding your customers' behavior helps you identify those at risk of churning.
But identifying them isn’t enough–you must work on a retention strategy that appeals to their needs. These are three proven ways subscription companies can prevent customer churn:
Cancellation flows: If a user tries to cancel, automatically enroll them in a cancellation flow and provide tailored options to try and save the subscription.
Pausing options: Allowing consumers to pause their subscription is a great tool to save subscribers by providing flexibility.
Upgrade and downgrade: Allow subscribers to downgrade their plan if they’re not using all their features.
As mentioned before, flexibility and personalisation are key for subscription growth. And churn prevention isn’t the exception.
6. Smart, automated dunning
Automated dunning campaigns are also part of a compelling churn management strategy, as they prevent involuntary churn, increase revenue, save time and resources, and reduce manual errors.
For dunning, there’s no one-size-fits-all approach. It’s important to make sure you tailor your strategy to your unique subscriber plans or accounts. Here are three tactics you can implement to start recovering more payments:
Intelligent payment retries: Leverage an automated retry model to re-attempt failed transactions when they’re more likely to succeed.
Account updaters: This recovery solution updates your customers’ credit cards to help recurring transactions process successfully.
Backup payment method: Prevent subscription interruptions with additional billing and payment options that help to maintain your strong relationships.
Customised email communications: Build trust and improve loyalty with dunning communications that match other marketing emails.
There are over 2,000 reasons why a credit card can fail–manual retries are not an option. Working with a subscription and billing platform, like Recurly, will maximise your revenue recovery efforts without lifting a finger.
Deliver value and unlock unmatched subscription growth
It's a fact: 50% of subscribers’ total customer lifetime happens after a recovery event. Optimising your subscriber journey at every stage is crucial to reduce churn and increasing recurring revenue.
While the approach to subscriptions has changed, their value, convenience, and content are the biggest drivers of new signups and subscriber retention.
Want to learn more tactics and benchmarks around acquisition, growth, payments, and churn? Recurly’s State of Subscription report includes actionable insights to help you design the right strategy across the lifecycle–just like SoundCloud’s.