Good evening all. Thank you so much for joining us. My name is Steph Johnson. I am part of marketing team for Recurley.
And I'm going to be hosting our panel this evening. If you have any questions, please do let me know, but first of all, we'll start off introducing our speakers.
So over to Oscar first.
Hi, everyone. Oscar Wall, I'm with Recurly, heading up the European operations here as GL.
We currently launched here in Europe, of close to two years ago now. So we are headquartered in in London.
We offer us, hopefully, some of you at least know a subscription management and and billing platform, to help brands, build lasting subscriber relationships.
Hi, everyone. My name is, Yurian. I work at a Altien, where a, financial technology company with an obsession for payments, especially in the subscription space, many of the large subscription companies started working with us, in our early days, and our obsession is around how can we increase payment success rates How can we help you scale, taking into consideration all the the local nuances around the world? And last year to give you a sense of the the scale of the company. We processed seven hundred and fifty billion dollars.
Hi, everyone. Tasmanichals here. So I'm the partner manager at Vertex. For those of you who might not know Vertex, we are in the tax space.
So we one of the leading providers in indirect tax technology and compliance, I'm sure you can all hear with the South African accent I I speak at least a little bit of Afrikaans, but not so much Dutch. It says clothing that's gonna get for today, but, in terms of my history, I've always been in the partnership space. Taxation is something I love. I know it's not a love of many others, but it's it's definitely one of the areas why we're around, of course, taxes going nowhere.
So it's it's really where Vertex was founded from.
Yes. Good evening, everyone. My name is Joyce from Wumo. I'm from Citizens and M hotel.
We are a Dutch found at, yeah, hotel chain founded in two thousand eight. We currently have about thirty hotels, all across the world in, cities like New York, London, Paris, LA, and, yeah, way more coming up.
Thank you. So, yes, do you think you can tell us a little bit more about the system? We'll we'll kick off with you. Of course.
Yeah. We'd love to. Yeah. So, yeah, like I said, we were we were founded thousand and eight, and I think what that's always nice to just to start with when I talk about citizenEM is to talk a little bit about the founding story because Back in two thousand and eight, the hospitality was, and it's actually kind of still is, it's quite a traditional industry, and, and, and our founder and founding team basically came together and say, Hey, what can we give our, the frequent traveler what they need and, nothing they don't.
And they basically took out everything, in in rooms, what you see that that is basically, a waste. So our rooms are quite, quite small, are quite, compact, they're quite efficient. They have a huge bet.
We we really, feel like it's the best bet in, in the world is I think it's it's almost two by two. There's a good shower and, and and everything you need in the room. We're quite digitally focused as well. I think we were also the first hotel chain who started with the the the kiosk check ins. We now have an award winning app where you can check-in, you can control your room lights and these kind of things.
Which may sound a bit gimmicky, but, I'm I'm sure I'm not the only one who's always fighting with room control switches in, in, in hotel rooms. And so so that's, a little bit of the story. And I think it's good to emphasize that although we do a lot of things digitally, we really, enforce our people on the floor to, to interact with the guests, basically. So all our digital things that we do is is to to stimulate our ambassadors, which we call our, our, our, people on the front line. To actually have more interaction with, with our guests.
Hey, thank you. Can you tell us a little bit about why subscriptions Yes. Yeah. That's that's also, an an an interesting story.
Yeah. So, what we've learned, we started already into this direction, this thinking, I would say, maybe four or five years ago, as an as a rough idea, and then we start to investigate like, Hey, what what what put the subscription in hospitality look like? And we started from, what kind of pain points do our our frequent guest actually currently, what do they currently have? And There there were a lot, but we found that there were two main points that we've noticed.
And we saw that, price, price security, actually, so not necessarily the fact that a hotel costs a certain amount, but more the fact that every time when, when someone was searching for, for a price, our website says price a, booking that comes as B, Xfias at C, and it it every time it was different, which one was the cheapest. And, that cost the them time, they always wanted to stay with us. They made that decision, but it cost them time to to look around a different platform. Surprise security was one pain point.
And the other one was that they they said it was, yeah, we really like your hotel.
But it's often sold out in in in the place and the time that I want to stay.
I'm a frequent guest. I would love to stay even more, but you're sold out. And then we said, okay, let's build around availability and price security. Let's build a proposition. And, yeah, that that turned out to be our subscription, a product, basically, and we've added a lot more in the value proposition and we're planning to do, to do more.
Brilliant. Thank you. Austin, maybe you can tell us a little bit about the subscription space from a customer like sister name is Povy. Absolutely.
I mean, I think, generally speaking, This model here is about adding value to, in a subscription offer. Right? So you have a, core product, and you can augment the experience and build a stronger relationship, maybe longer lasting relationship with, your customer or subscriber in this case. So you're adding value to your general business or your your base business.
There, of course, probably many people in this room that have subscription as their main business model.
And and offer that in whether it's B2B or direct to consumer subscription. But what we see is part of the problems of a subscription, much like the promise of a, of of B2B SaaS solutions or a subscription, and, products or platforms and so as a service is that you can always you you build a long relationship, you bank on that relationship, and you continue to add value over time. And in a lot of industries now where subscriptions have become more and more prevalent. There's more maturity, around the customer expectations on what you offer, has grown greatly, in a much more mature and sometimes saturated space. So what we, often encourage and and see among our more successful customers is where they continue to add that value have the long lasting relationship in mind, and I think that's full on display, in in what you guys are doing. And it's it's really inspirational to see.
Thinking about customers, you need anything to add from like a customer's expectation point of view with payment Yeah. Yeah. I think Famous is, fascinating space. When I joined ten years ago, somebody said, you should talk to a payment company, and I need to. He said, well, that that sounds like the most boring thing in the world. And ten years later, I'm still extremely excited about being in payments, and I'm learning new things every single day.
I think, you know, from an outside perspective looking in, you just expect payments to work. Right? And company spent a lot of money trying to build the perfect service for folks to subscribe. But then when you have the conversation around payments, say, hey, do you actually know why your payments are failing then it turns out that many companies don't realize it.
And then it's like, okay. You're spending a lot of money. Why you're not trying to make sure that you are are actually able to capitalize on it as well. Because there's no bigger frustration than somebody wanting to subscribe to a service and not being able to.
So being able to help subscription companies be successful, not just in one country, but in, all countries around the world is extremely important because, unfortunately, payments don't work the same in every single country that you go to.
So, as I mentioned, I know tax was not an overly glamorous topic, so I won't bore you all with the the ins and outs of tax, but really The more countries you enter into, the more complex it gets, the more products you sell, even more complex it gets. So this is really why many in the subscription space, and we often call this as reoccurring revenue, it's reoccurring risk. And, really, what we mean by that is with a digital good or service that you sell in online is subscription.
Digital goods are taxed on the place of consumption. So where's your consumer? So the minute your consumer is cross border, you start sending into the US, across Samya, Asia Pacific, Latam, Those complexities are based on that region's rules and liabilities. So how are you meant to know where your customer is?
Cause they're on your checkout, you based let's say in the Netherlands, how do you know what tax rate to apply? So it's about how do you manage those rates, how do you click the right data from the client so that you know what the tax rate should be. But then it also comes from a compliance perspective. So the more regions you move into, the more liability there is.
So how do you know when you need to register, when do you need a file, and whenever you meet your threshold? Some regions you can sell into for certain finance numb a number of transactions, but when you meet that threshold, you need to register. So really, tax is complex. I mean, implementing a subscription model is complex enough But it's one of those things you need to consider when you go cross border.
What are you doing to stay compliant? And I really that's why you need a tax software and pay.
Thank you. And, Keith, can I ask you about what you're seeing in the trends with some of your subscribed is at the moment? Yeah. So, what we currently do in a lot, and I think we've launched this product in March twenty twenty two.
So we're in we're not live that long actually with our subscription product. And I think it's it's it's it's it's still all learning and we're still improving. And working on our value proposition. And one thing we do is we organize, like, feedback sessions with our, with our actual, subscribers We put them in the same room, either digitally or physically, and we learn from them what what we can, what we can improve, or what actually goes well.
And for us, as as a hospitality company, we learn that, it's not only sleep they're actually interested in. They also are interested in what we can do for the work component and also a part of of play within our subscription. So, yeah, that's also what what we really try to Cater for in our subscription product, and also we'll try to cater for the the, yeah, the coming years, basically, and I think also just to, to reflect back to you, you're in the the payments should should work. Easy everyone expects them to work.
I think for us coming from, like, a single transaction company and a single business going to the subscription. I mean, we've found out so many things that that didn't go well from start, but, luckily, we, we worked together with Ajay and as well to to make it, to make it work and to make those recurring transactions more smooth as well.
I think we're all interested in hearing about what as experienced people in the industry or or what you're experiencing for the future. I think Union had left know from you if you're seeing any trends and payments or things that maybe you can share from your perspective. Yeah. Sure.
Digital payments are up to me. Right? We don't back they're trying to, to stop.
I think on average, I think in in Europe, the average household has around ten subscriptions, which is quite a lot. I think it can be a blessing and a, and a curse depending on how you look at it.
But we also see that companies have to do more with fewer people, right, because of the macroeconomic climate so companies wanna do a lot, but, they might not, have all the resources available.
So really prioritizing on what really matters is is extremely important.
And in in in payments, the challenge is typically around, okay, which payment methods should we offer to to be able to grow.
So, yeah, working with partners, they can also provide guidance in terms of which payment method should you offer, but also what is the risk? Like, we've seen a lot of companies that start to implement specific payment methods and and readjust just because they think, okay, implementing is quite easy, but then they forget that there might be yeah, big implications on the risk side as well, which is only gonna, yeah, make the bottom line hurts. So there's, again, a lot of nuances. But, yeah, more payment methods is, something that we will expect in the next, couple of years.
So it's only gonna get more challenging Thank you. Tessa, I think you've got some huge tracer share. So from a merchant perspective or from a vertex perspective, we've seen many, many companies move to subscription models. It's no surprise.
It's a solid stream and a predictable revenue stream for companies.
I think there are two Really main factors that are fueling the the drive towards subscriptions. One is consumer preferences.
So I'm a sucker for for a consumer and a subscription. Why? Because it's perceived to be really convenient.
It's perceived to be cost savings and it's super customizable. So a great example I use is our weekly hellofresh. So what hellofresh is? I get three prepared meals.
I get to choose from a range of recipes. And I don't have to be relatively inspired to decide what we're gonna eat tonight, and I know everything is proportioned to what I need. So the great thing about that subscription is It comes to my door. I don't need to go out to the grocery store and order what am I gonna do tonight, what am I gonna whip up?
It comes to my portions I've chosen my recipes.
If I host people in the evenings, I can log on my app and I can increase the portion sizes. So I can say I'm adding one or two, three more people at the cost of maybe two pounds extra, which is nothing.
Also when we're starting travel, I can pause the subscriptions, which is great. So next week, they're not gonna charge me because I'm not there. They're not gonna deliver the box because I'm on holiday. Then last clearly, in terms of canceling, when I wanna change things up, I can cancel literally at the click of a finger. So really from a consumer perspective, It's easier than ever. It is what's driving in terms of companies why they're considering subscriptions because Israeli consumers are driving.
Secondly, we've seen the market share grow tremendously in the subscription space. So subscriptions are meant to In twenty twenty five, they set to be at about one point five trillion dollars in market share. So companies on traditional subscription businesses. So outside of the media, telecommunication space, publishing space, we've seen a lot of manufacturers and automotive companies move into that space. And with what I mean is, so when we take an example like general motors. So now they're offering in service subscription offerings around emergency services, navigation services, and they're charging a monthly subscription, which is great. So they predicted to make about twenty billion US dollars in revenue from just that subscription.
You can understand that puts him in the lead of a Netflix, now, Spotify, Peloton. That's really, really Not out of the ordinary. These are traditional businesses that used to do your day to day transactional sales, and now they're moving into the subscriptions space because it's a really viable stream of revenue for them. We've also seen VW, Porsche, Porsche, and Audi, Toyota moving to subscriptions.
So The minute you lose your your key, how do you access that, you can download an app at a monthly subscription, and you can access it remotely. So you can see why these industries are starting to look at subscriptions so favorably because it is a great revenue stream for them. It's occurring. It is predictable.
It's solid. It attracts new customers and investors.
Absolutely. So, I would bring it sort of, hopefully, to some degree to a close on, or or bring it all together here that ultimately the subscription space is now growing very quickly as you said, but it's also ensuring in many places. Right? And again, there's saturation happening. And what that drives is that consumers have much, much higher expectations on their both in terms of payments working, really everything should be smooth, everything should be predictable for them as well. But as you can imagine, with the space maturing with consumer expectations going up with lots of great tech being available to make this happen.
It becomes harder and harder for businesses to pull together competitive subscription offers that have all of those components where everything does work smoothly. Whether you're an existing business that are probing into subscription, to subscription market, or if you're a new business that wanna launch a subscription offer as your main stranded business, all of a sudden, you're now, you're no longer able to just dip your toe in and then step in. You have to not compete with some very, strong platforms and offers. And the benchmark has been set for in some use and, choice, and and so on, it is far, far greater. And as everyone in in the room knows, speed to market, being able to streamline operations on, on the, on the back end on, and, removing reliance on engineering to launch first into market and so on is extremely important to be able to move into this space and do so competitively.
And that's, a big part of the founding philosophy currently to make that easier for, our customers. So, helping them acquire better, helping them retain customers more predictably and and better, and streamlining operations, along the way. And a big part of that is working together with great partners like this. And instead of having a customer having to integrate all of these partners individually into their tech stack, expend lots of engineering hours on the initial implementation and on on now.
An ongoing on maintenance of that. We help take some of that burden away. We offer a platform that's available for operators to to, operate in and and put offers to market easily, and we take a lot of the burden of, internal engineering teams to build or integrate, as well. And all in all, this allows for what I think is the trend that as subscriptions, mature as markets become saturated, the customer expectations are going through the roof. And it's increasingly difficult and can become a competitive disadvantage if you're not, if you don't have the, the tech and the customer, friend and customer experience in mind.
Thank you.
Anyone have any questions, don't feel pressured. You don't have we're open to be here with no chat. But any questions for anybody?
Yost. How how does the same subscription look like or what's the value proposition? Where do you get for it? Yeah. So, basically, we started around, price security and guaranteed availability So, now we've, we've started with building it around that. So you pay ten euros a month or one hundred euros a year.
And with that, you get, always fifteen percent discount. You get a free, a guaranteed room, you get a free, room view upgrade our rooms are, by the way, are everywhere the same. So we don't have room upgrades, but we do have view upgrades. So we give you, a better view.
We give an FNB discount. We include late checkout.
And we're gonna launch co working as a free perk like, soon. So that's, that's a bit out of every proposition currently it looks like. Do you have, because there is a difference selling to B to B or B to C. Like, how how does your subscription, manage the B2C versus B2B?
Yeah. So, that that's also a very active discussion, at the moment. So the last, yeah, since since since we've launched, we focus mainly on B2C. We actually do see companies buying it, in in sort of bulk, but then doing it themselves.
And we also get already questions from companies like, Hey, we this on your website. Hey, we my employees are talking about this. What do you offer for us? And, we at the moment, we don't have an offering for B2B. But also this is something we're, we're gonna look into, a very soon. Yep.
Thank you. Any other questions?
It's a nice question.
With an upcoming, trend of hybrid carrier and parts, like, them. So with revolute and Gong and all these kind of companies, you have this virtual credit card, which is also kind of your credit card.
You can delete it very easily or you can make one specific one for a specific currency. Do you think will impact the subscription space or it will this impact? Yeah. Will this impact the payment method used for subscriptions? Thank you for the question.
Good one.
So, yes, it it it has an impact. So, typically, when we talk about, optimizing payments for prescription companies. It's very important to be able to see, okay, what kind of card is being used. Right?
So for instance, if it's a credit card, And there's a higher likelihood that you'll actually be able to build that card multiple different times, whereas if you see, it's just, a prepaid debit card, it may be you don't even want to accept it depending on what type of lay that you're looking for for your for your subscription term. So I think it's very important to be able to see at the moment of signing up what type of card is being used, and then you as a subscription platform can decide. Okay. Am I comfortable with this type of payment methods, or am I gonna ask the subscriber to maybe use in different cards?
Yep.
Hi. Probably a question for her, but, you've timed this event at the time of IBC.
In the strip streaming world, the big shift has been away from the pure play streaming and subscription streaming. To hybrid business models where you have subscription coupled. You have personal business models. What are you doing to you want to keep that case and you want to keep it?
Yeah. So, hi. So, so, obviously, the streaming space is a fairly mature space in terms of subscription. It's it was, a subscription model before it went digital even.
Right?
And the question was around how you can accommodate, for hybrid models, where it's advertising funded, and So AVOD and SVOD in in the industry terminology. Right?
And the way, we at recurrently look at subscribers in space is that everybody's subscribed, is a subscriber in that space. So the people who are accessing your platform, but are not paying a monthly fee in an SVOD model, but are enjoying the content, but with advertising is still a subscriber, just not a paying one. And the reason why we look at it that way is because, through, through analytics of cohorts in your space, you can you can figure out how you can move depending on your business, strategy, really, and and how you want to monetize where you see the most success you want to be able to move subscribers from one model to another. There are even, screening services that offer truly hybrid models, right, where you you can pay one price and get no advertising. You can pay zero dollars and get a lot of advertising and something in the middle and get, you know, just a little bit of advertising. Right?
That kind of, flexibility is ultimately gonna be driven by what consumers want. Right? And in a saturated space such as the global content, seen as today with all of the plus services entering the space recently.
This has to be a this has to be a competitive advantage or a differentiator.
If it isn't, and if it isn't thought, like, of like that, it becomes a competitive disadvantage where a consumer might choose to not watch your content that they might prefer because they don't you don't offer the the the right kind of version of hybrid model or the right price point or niche enough, subscriptions, So choice is very much at the mind of consumers, and in saturated spaces where they have optionality, it's really, really important to do that. Therefore, we recommend that you think of all your viewers as a subscriber relationship, just some of them are not paying yet. And then you can choose to move them into that space based on analytics, really, and data, and and, and, how how the rest of the world works. Does that answer your question?
It's getting.
And you can see each other off Absolutely.
But you wanna ask so many questions? Yes?
You, but I'm curious. How has it been picking up in terms of my budget? Like, did you see already that maybe some percentage of your guests, members? And secondly, if so, do you have a geographical focus where they're from?
Yeah, without going into specific numbers, yes, the feedback of the market is very good. I think also the reason why I'm I'm I'm lucky, to be to see the here actually. So, we've put a we've put a target in, in the twenty twenty two and and and we've we've captured that target. So that was really good.
And then we thought, okay, how can we even put more emphasis on our membership because we see it's working. The feedback is good from the market. We are growing also geographically to more hotels. So the the the subscription product actually starts to make more sense, because we have, a more geographical, spread.
So the the interesting, on your second question on the geographical focuses, we are mainly expanding now in the US and the EU.
But we see that almost half of our subscribers are actually in US.
And then from Europe, it's literally all over the place, basically. So for us, that's quite interesting. We we we have some thoughts on it, but we also are not fully sure yet how it's come how it comes that that it's it's it's such a popular model there. It it can be related to maybe that, Americans are a bit more familiar with subscriptions than in EU or, we credit cards there more easily, to sign up. We also don't know that yet. But we do see a lot of, more potential in the US, because a lot of our subscribers are from the US and that we're also growing there. Thank you.
I'm trying to. Yep. So, also videos.
If you have to give one leading figure to, play success of your subscription program. Which figure would you give? That would be your north star free subscription. Brobell.
I think, the the north star of our subscription, Bob. Yeah. Then, I'm I'm gonna be bold here. I I would say, ideally, we want to, I think the the north star in a couple of years to be if I look at it from a from a percentage ratio, we say, let let's say that one third of all our unique visitors are actually a subscriber.
And because they are more valuable, they bring in, let's say, two third of, of our revenue. That will be our, our our north star in a way, but the I'm I'm sure that's not a north star that's around the corner yet, but, that's, at least an ambition that we, that we would like to have. Would that be fair to categorize your subscription program, mainly some, some kind of marketing initiatives to get, actually, all your bookings or at least one third of your bookings through this program? I wouldn't call it the marketing initiative I think it's it's a bit touching back on the previous question that it is more a hybrid model.
So for us, it's we have a lot of, what we call free members that people that just create an account on our website, and and and have a little bit of discount and then we have our our our subscribers or paying members who pay and actually, get more from it. So it already starts a bit like a freemium model in a way. But it, but for us, because, it needs to trigger another transaction, basically. So the recurring revenue is is is very nice, but it's a small portion.
In the end, it needs to result into more bookings or, working for hotel or attending events. So the the the the subscription is a is a way for us to, have more loyal guests and that have them make more bookings for us. And that's that's where the real value sits for, for SIS and M. So in a way, we are also a hybrid, have a hybrid model like, some streaming services.
Yes.
Thanks. Thank you. Any other questions? Yes?
Be there.
I'm paying it from a twenty five for me to focus twenty five.
Thank you so much, by the way, for being here. It's very, very insightful. I have a question about if you guys have any benchmark on decreasing, increasing, increasing, increasing, advice of a subscription.
So we have the intention right now, right? Because of like, with this, we all accept, like, disagree everything is that green, the the price is getting higher. Description, though, it's a bit like left behind, as in the one will kind of even tolerate the fact that you're gonna increase the price and try to, align with the cost lag. Right? So we sent I mean, some of you have seen that, we increased the price of our subscription at forty five.
And, yeah, there was a kind of a sometime to shoot you a run that. And and I was like, do you have any benchmark from a user experience? Like, what is the best practices there? And why subscription before can they're not gonna that, yet, we should also align with what year after year, the price of everything is just increasing. So, yeah.
I think I'll have to Yeah. Yeah. So, we, we benchmark a few different ways. So, we have, completely stripped in anonymized data that we can look at from our customers so we can, look at that from from different segments.
And we also do surveys on a quarterly basis in our state of subscription, reports. So that's something where we we will make sure that you have access to that and and share its available, via the website, but that is quite full of benchmark, across some of some of which include price sensitivity and so on. I think what's important to remember is that it it's very important what segment we're looking at. Right?
So and and a lot of what, drives that price sensitivity is choice, again, as I mentioned before. So in a in a market where there is choice, price sensitivity is obviously, can obviously be higher.
We've seen pretty great success, and I can't give you, hard data here. We'll have to refer to the report. I should have, internalized and memorized it. But, novel or more novel concepts within subscription such as RAM pricing and different ways to ramp pricing up and down, and being able to do this on a cohort basis, that can be influenced of how loyalty are, how much they consume of music in in your case, has a huge impact on how successful the price changes are.
Ram pricing is a particularly fascinating one where you think often of Ram pricing is something where you you come in at a low point and and you can ramp pricing up over time, so you lower the barrier of entry and get people on board. And when they fall in love with your service, after know, based on data, you can figure out when you can start to increase pricing. So it's almost like individual pricing if that makes sense.
But what we see a lot of successful is actually opposite where you come in, at a, at a price point, but you reward loyalty especially in highly competitive markets where when someone has been a subscriber for, a long time in proven loyalty, you actually give them, a break on the subscription. And when you look at it over, macro figures like lifetime value and, and, CAC over LTV and so on, that can that that is some degree surprisingly, but in especially in saturated markets, we see customers having those ratios outperform, the vanish marks we have in those spaces. So there's a there's a lot about that, but it's very important to be data driven in it, and and very deliberate.
I think benchmarks are a good indication, but they have to also be taken with a grain of salt because your space, your customers, your market, your competitors are unique. And sometimes there's just not enough sample size to to benchmark. So I I would use them as, guidelines, and then making sure that you have your data available and segmentable as I know you guys do it at Spotify for sure. But, so so that you can you can do your own individual analysis and track against, and make some assumptions, towards those benchmarks.
Thank you, Costa.
Any other questions?
Thanks? Any questions? Chris?
I What did you guys do for retention? Like, number one, what are whatever retention trends in business. And number two, what do you do to maintain retention of users? Like, what are some things that you found that really help in keeping people subscribe?
How how sets you years first, if you may?
Yeah. So what do we do to reden for redemption? I think we still haven't found, the sweet spot yet, to be honest.
We see, I think it's it's basically an industry that churn is in an industry wide, problem. So, we we do quite some, specific hotel related campaigns.
Like, how we see you booked so many nights, book one more, and you get your, you you break even on your investment, like these kind of things.
We see some positive results, but could also be better. So we're we're just trying trying a lot of things out.
And I think also it it it relates a bit to, cancellation in general. I think, what you also see as as a trend is that, it becomes more easy actually to cancel, which I think is a good trend because you also see, you know, for yourself, how annoying it is, if there is no actually no cancel button where it's grayed out or you or whatever, and that frustrates customers even more, and they they won't come back anymore. So, but if you make it a little bit more easy for them, then there, at least that's my perspective. There's a bigger chance of them coming back. For sure, there's room for improvement also on our side.
But, yeah, to come back to your question on retention, we're just trying things out and some things work, some things don't, in certain campaigns, certain promo codes, certain, free trials, of course adding more stuff to the proposition, because we are quite transactional.
So in the end, it's also about offering keep offering value to your, to your, customers. And, yeah, that's how we try to, to maintain them.
I know for a fact that Oscar has some good advice on charity to them. That's a almost like a planted question.
There he was. And No. No. No.
No, but, I keep it short. I I absolutely could talk for a long time about this, but it would be become a pitch and we don't want that, necessarily here. But One one thing I, I can focus on here is that there is, in our world, we think of churn in and retention in two, main categories. So one being what we call involuntary churn.
In subscription, that's, something very important. So our definition of or the industry definition of involuntary churn is when someone doesn't actually mean to leave your, you will leave this subscription or your your product, or your offerings, but, something breaks in the technology or in in the payment chain, and they end up leaving. So we, have over the years built, quite a lot of functionality around preventing involuntary churn. So this could be things like making sure that the account on file is up to date.
You can make sure that, an expired card gets updated behind the scenes, it can, it can then, all of these are preventative measures. Then when the involuntary churn event happens, so say you don't have enough funds on your debit card and payment fails, then we do, retries and, and, capture events afterwards to make sure that, we do everything we can for our customers to retain that subscriber and and make sure the payment goes through so for in that scenario, it's simple one where there's not enough funds in in the in the account.
We'll make sure we retry it based on the amount, based on the country you're in, based on, the type of card and so on. We try specific dates that we know have a higher success rate. And all of this is based on data and machine learning. So in Sweden, where I'm from, everyone, everyone uniformly gets paid on the twenty fifth.
So sure enough, our model suggests that retrying a failed debit card payment or, or direct debit payment on the twenty six as a higher successor. So it quotes so involuntary churn is is a as a concept, you have preventative measures, and then you have post failure events. And and that that's one way you can you can, minimize churn behind the scenes. Then there's the whole category of voluntary churn, and now it's much more about your product, your proposition, making sure your you're doing everything you can to offer the right subscription, at the right price point to the user so that they see that the value is greater than what they're paying.
And that that's that's obviously a lot more about the product itself and the offer, but there are things you can do on the technology side as not sure if you're gonna, if you wanna add to it, I know you obviously, do quite a bit around, making sure payments go through, on the involuntary churn side. So give you a chance to add to it.
Yeah. Indeed.
Every country is different, right, like, you get to eat apple by Sweden that we also know, for instance, in, specific countries like Cyprus, where you have more people working in the hospitality industry, and those are people still getting paid cash. That for instance, you'll see a higher, percentage of insufficient funds declines in every country is, is very different. So taking that into consideration can really help to to elevate, the the results, but we actually also see a trend where initially merchants were focused on how can you help us increase the the payment success rate as much as possible.
But, and now, it's much more about Okay. Like, what's the value that you're gonna get out of it? So balancing, the payment success rate with also the cost because every every time you try, There's a cost associated with that, but not just from the payment company you work with, but also from the card network. So making sure you find the right balance is extremely forwarded, and then balance is gonna be different in every country that you're gonna operate in.
Thank you. Any other questions?
Cheese? Yes. Who's first?
Sorry. I can put all cheese on. Okay. Can I pass on?
I guess by I should not ask her. So, when it comes to subscription churn, have you seen any companies having success in time?
World program, tourist subscription.
Have the rewards program such as. Yeah. It's actually my sister's name. I have rewards for everyone helping me.
That's one of your med folks. Yeah. So there's there's the cost of it and it's easier said than done in many cases, right? Where where where you can really tie additional and exclusive value to those, loyalty or or membership like subscriptions, that's where we see in our customer base the the most success.
So to give an example, you you mentioned, hello fresh as an example, before, if we take a spin on on that, for example, where you could, for example, give, something as simple as, and that this is not, reflecting a head of fresh specifically, but that space. But if you could, for example, give access to the most, sought after delivery times, so those that was golden hours after work, but before it gets too late before dinner and so on. If you can give access to those, more or less exclusively to people who are subscribing, you're you're hitting this sweet spot really with adding exclusive value on top of your core product, and that's something you can that you can charge for.
The real value in that is not actually the revenue you get from subscription itself that will bring some revenue in. It's predictable. That's great. But the real value you get is loyalty.
And so so it almost becomes the self fulfilling circle where you put it out there. It's a it's meant to be a rewarding loyalty scheme and but you actually increase loyalty by by doing twofold. Right? Yeah.
So, and what about the points?
The points I think from where we are, points is almost like its own currency, right? We often advise that you can, you can have point schemes, but actual, paid for programs where you get like, tangible rewards can often have, higher impact. So, in the hotel business, this is that I'd be curious to hear what else has to say about this, but points are obviously very prevalent and frequent there. But it's a currency that only works within your work.
And and it's something that, you know, creates loyalty, but can also, to some degree, like, force people to be loyal. Right? Where you have, if if you can instead create, more easy, easily accessible, loyalty schemes that you can pay your way into, and and as long as the value is there, that can sometimes be more accessible. I struggle with a lot of airlines to get enough points to actually get any any perks, for example, and, and also at the same time, don't wanna be limited to just fly one because that's cost prohibitive or they don't fly I need to go and and so on.
So I think to to have to consider both and and think about it, from from that standpoint can be be helpful. So points have a place in it all, but also when you part with a little bit of of cash yourself, you're just intrinsically become more more loyal because you want value for that spend. And so any, any sort of data on churns that you've seen up?
In terms of adding loyalty to that.
I'd have to refer to the the the research we've done. I I don't have off the top of my head. I'm sorry. But what I what I can see is that, from the case studies in the customer success stories, we've seen that the the if you look at the uplift in revenue, it's often coming from the core product itself, through that loyalty mechanism. So people stay longer, spend more, so your cacto ultimate ratio is better and so on.
Part of that, I'm sure it's also churned, but I can't give you any hard figures on it.
So follow-up on people with their return. We talk about the voluntary return instead duty's chamfums as a reason for payment failure. How would you recommend identifying if that technology or the transportation plan is actually involuntary or voluntary, I don't talk about especially when you have an ATM. Right? Have a top of my account don't have that money to to be able to successfully refer my subscription. And basically, just fake profit from the dining period, the waste period that I give away. So, my question is, how do you recommend trying to them to differentiate the the good actors from the bad actors?
And, I guess, probably it's my view, obviously, what to do about the directors in this case. Give them a chance or just turn them straight away. Yeah, they probably wanna share this answer too. I can start real quick.
I think it's hard, right, to differentiate, and you don't want to, you don't wanna alienate the the wrong type. Right? I think that's, first of all, how you should probably think about it to treat your customers with, with that respect to to not to to trust them. But, obviously, there are some signals.
I think, I'll let you that, Yuri speak, to this more, but the type of card and the type of payment, can sometimes be, be a a hint. Right? So if these are, if these are, sorry, I can't see, you know, if these are the kind of debit cards where you where you top up and put a, like, these prepaid cards, for example. If you see this repeatedly from a prepaid card, you can start to to think that this is a highly, high more likely, instance of of someone taking the be or abusing your service.
Right?
I think that's, again, when choice is important, so you should be able to do different things to different types of customers on the same subscription plan. So your flexibility in your downing, for example, is very important. So you might want to if you have the right signals, actually shut off the service and then try to recapture and win them back almost as opposed to, allowing them access to the service while you're trying to recapture. You may have different strategies, and that's just one example of of, you know, prepaid card versus a real debit card versus a credit card. Now if you the the only way to know this is to analyze large sets of data. Right? It it's impossible to do, without enough sample size.
I think in the industry, we try to help with our state of subscription reports and so on to to show trends and so on, but I think it's also important that you you have that available data available for your customer base so you can make make those judgments yourself.
Yeah, it's a it's a a really good question, and the answers that it really depends. So every company is different. Everybody has a different risk appetite.
So the answer is in in the data.
And, typically, what we try to do as a payment company look at, okay, you know, where is it coming from? Where do we see these type of trends? So for instance, as discussed before, some would say, specific payment methods, I'm not gonna offer to people that I don't really know. But then if I know there's loyal, customers, loyal tribers, I might be a little bit more flexible on the type of payment methods that they that they offer.
But then if there's a specific decline for whatever reason, then It's how you deal with that into himself. Okay. How do you allow them to maybe use a different payment method, as well? Because again, like, it's not that everybody always have access to, to a card.
If you can offer, another payment method, that's, that's really helpful as and there's really interesting trends that you then, can uncover as well that, for instance, in some countries where there's indeed a lot of, cash based payment methods that people are happy just to go to a convenience store every single year to just subscribe because they love the the subscription that they are using. But again, there's, no real, wall sized fits or answer here, but, it's all about looking at the data and and finding whatever works best for, for your business.
Yeah. Just add one more more thing to it. When you mentioned about wallet functionality, multi payments met method on the account, that can definitely be part of your strategy to look at. And, again, think about this as a long term relationship and act thereafter.
So, obviously, they sign up and they fail on the on the first monthly payment thereafter. Of course, then you don't have any indication of whether they're they're loyal. But if you have subscribers that have been with you for years, or months or years, then you could you should probably make different decisions based on your risk profile. Man.
One thing we've seen, some of our customers have successfully is that instead of sort of shutting off service for repeat offenders, they force them to add a secondary payment method to kind of suss out, if you will, whether they want to be with you, and and they just have trouble making ends meet. I mean, sometimes I don't have enough funds to pay for the service, or if they are careless or or or don't wanna or or trying to, play or game the system. So offering wallet functionality is definitely a tactic that can work that's less off putting and, and potentially, minimizes the risk that you're you're picking the wrong approach for a loyal or someone who really enjoys your product.
Thank you. Thank you very much.
I think we'll draw their turkeys. I think there might have been a couple of other questions, but everyone is here. We're gonna stay some drinks. More hungry.
More drink. I always have some chocolate bars, goody bags, anything, but thank you all coming, and thank you to our speakers. Thank you very much. That's it.
