Uncovering the subscriber landscape

Alright. Let's let's get into it. Welcome again, everyone.

My name is Oscar Wall. I'm the general manager for EMEA here at recurly, joined today by Jonas Oström, founder and CEO of Recuro. And we will do brief introductions, very soon here. But, again, welcome to to webinar today. We're we're digging into some statistics from a recent survey. So we're actually getting a bit of a preview on on statistics that have come out from that, sent around customer perspectives and and trends.

In the subscription space.

Couple of housekeeping items.

There is a in your go to webinar or or webinar control panel, you can ask questions throughout this session in the in the question section. So you can just drop down there, and and we'll monitor that. And very much encourage you to ask questions throughout because we we we love this to be attractive. So post your questions, we will see them and we'll we'll respond to them as quickly as we can.

So so please go ahead and and use that functionality.

And we will we'll step through, as I mentioned here, and a number of statistics that have come out of our our latest survey and and more on that in a bit. But first, brief instructions from Jonas and myself, and then very brief introductions of our respective company. So I I did mine. So over to you, Yvonne.

Perfect. So the high everyone must be here and and meet you guys So my name is Unas, and as Oscar said, I'm the founder and CEO of Recuro, and I myself have a background in strategical solving in analytics and in the media industry in particular. So I do a lot of my work there right now.

And I'll talk a bit more about Recuro shortly, but I think over to you again, Oscar, to talk a bit more about Recurly.

Absolutely. Thank you very much. And then for those of you here who are not intimately familiar with early. In short, we are a subscription management platform that our customers used to handle a number of the tasks and activities around managing both subscribers and the actual subscriptions as they are live in the world.

We provide these services in in large part to allow our customers to focus on their core business.

Be that streaming media, delivering content, delivering software solutions, and so on and so forth. And as you are probably all aware, there's quite a bit that goes into the management of both subscribers and the subscriptions that they they that they have active actively running.

We like to look at our platform in a in a few different categories or areas as we help our customers with effectively representing their offer or rate card, if you will, through plans and pricing, and and also the all of the related items around that from an acquisition standpoint. So discounts and coupons and promotions and so on, All of that can be set up and and managed in recurrently from a from a representation of the subscription offer itself.

We then move on to help our customers with all of the things that go in around managing a subscriber and their subscription. So these could be things like allowing them to upgrade or downgrade or pause subscriptions.

A lot of tech is necessary for that, and and we, again, try to make that easy for our customers to to offer to their customers respectively.

Through through functionality in our platform.

As subscription is obviously a big part of this is collecting payments on a recurring basis. So We allow for both payment orchestrations where you can leverage multiple gateways depending on your geo and and market and so on.

But we also handle a number of the more complex and difficult things about taking payment on a recurring basis when end customer is not present when when a card is charged and so on. So a lot of technical aspects around that.

The three d s challenges here in Europe, for example, and so on and so forth. Now, because taking payment on a recurring basis when the cardholder is or the end customer is not present. It's difficult, and it's also quite a bit that we help our customers with around retention. Concepts like involuntary churn management or or prevention, as well as as churn management in in a broader scope around voluntary churn and so on. But effectively allowing our customers not to have to think about what to do if a payment or a payment for a subscription or a renewal fails, and so on. And that all goes into our retention management components.

And and finally, we also allow finance teams to streamline their operations.

We have all of the information about subscribers and the subscription and the revenue associated with that, but also whether they succeeded or failed, if they've been terminated when, if there have been gaps in the subscription, if there have been no past, and so on. All of those are important elements when it comes to recognizing revenue, and and our revenue recognition module helps streamline that and make it easier for finance teams to have an ongoing view of revenue forecast revenue, how that will play out over the year, and and also close to books more quickly at the end of the month or quarter or or year.

Recurrently sits in a in our customer's tech stack relatively centrally.

It's integrated to a number of systems, and everything that we do is underpinned by reporting and analytics both in our application itself, but also certainly in terms of feeding data lakes and so on. And we would not be able to do this if we were not part of a of the ecosystem itself. So a lot of development and investment from our end have gone into integrating with premium payment partners, ISVs and and and so on and so forth, and and we value our partnerships and and the technical integrations that we have those very, very, very highly.

That's a very quick overview of of recurrently, but the main thing to take away is we try to deliver value to our customer in in the in a number of different areas, and and also allow them to focus perhaps more importantly on their core business.

Over to you, Yonas and and overview of what you guys do.

So thank you, Oscar. And Kuro, we're a consulting firm, so we don't do any of the stuff that Oscar just mentioned. So that's why we're a great fit for each other.

So we're a consulting firm focused on helping our clients grow sustainably using the subscription distance model.

So as you know, the subscription business model list is in a lot of different verticals in a lot of different industries. We've decided to particularly focus on these four industries right now. And here's where we are strong and where we have our background.

So we do a lot of work in the media and publishing sector We work a lot with the b to b software as a service companies. We work with business to consumer apps, and we started working more and more with what we call product companies, or product as a service companies. So basically, companies or industries that have traditionally, transactionally sold a product, and now looking to to transform that into some type of recurrent service instead. So we do do some work there as well.

And what do we actually do for these clients? Well, we basically do one of two things. We help them with business strategy related to their subscription business.

Usually around pricing, packaging, growth analysis, growth strategies, etcetera.

We also do quite a lot of like organizational design and and tech and platform selection when the client needs needs that as well.

And secondly, we do subscription marketing. So we have a team of of CMOs and the digital marketing specialists here in Stockholm.

And we we utilize that team to drive tangible growth our clients in our clients' businesses, basically.

So that's what we do. And again, we're about ten people based in Stockholm. We work with the Nordics and Europe as our primary market.

Excellent. Thank you, Yonas, and and like I said, a great great combination of of technology to to help solve all of this complexity, and and in many ways, enable strategy that that the guru consult on. So I'm very excited about about the partnership and and are are conducting a series of these webinars. This one, again, focused on what what is up on the screen here.

The research that we do into into the market both in our existing customer base, but but more broadly as well. And what you will be seeing here in this webinar is a sneak peek really of statistics that come out from our very latest survey, which is due out on June twenty first, so next week, where we've surveyed over six thousand subscribers in six countries, both in North America and here in Europe.

And ultimately we ask them what what makes a great subscriber experience, and what is it that you expect from from subscription services these days, and and, ultimately, what's at the at the heart of of this relationship that you as the customer have with the brand when you engage in the subscription model. So we'll be going through a few of the key statistics that we picked out, and we'll, of course, make the full report available to you when it launches next next week.

Again, I'll just decide to over to the next slide.

There are a few key insights that we picked out that are, I suppose, themes throughout the rest of this session.

One thing is quite clear, as the subscription space, especially digital subscription space has has matured, we're entering into an era of of personalization around these subscription offers where that becomes increasingly important.

It's also very clear that a subscription relationship is a long term one. Right? It's it's built into the business model.

But it also means that that that it means that you have to think long term and build a sustainable relationship with your subscribers, certainly. But that said, it's also clear that impressions, first impressions matter, and how easy it is to sign up for a subscription. It it can can often determine quite a bit around how how how you perceive that service and and how long you essentially end up being a subscriber.

So the key inside here is the subscription sign up. It's really like a first date, and it's important to get that right and and and and start a relationship off on a good note, I suppose.

And loyalty is another key insight, how how important it is in an increasingly competitive space, where there are also now macroeconomic pressures on people's actual, sort of, disposable income.

It's it's our job collectively to to make sure that our subscribers or our customer subscribers are valued and that they feel valued. And that can be done in a number of different ways, but it's increasingly important as as it should be in many ways.

But let's dive into to the first statistic, and I'll I'll let Jonas's comment on this. In the past, twelve month alone, fifty eight percent of of our respondents have indicated that they've started one to three subscription services. So there's been a lot of talk in in in the industry as of late, that Is the subscription models stalling out, order, you know, what impact will the the cost of living crisis if you if you want to call it that have on on subscriptions and so on.

But as we're seeing from this statistic that there's quite a lot of activity in terms of subscribing to new services. So you're you have any any insight on this audio perspective. Well, I think, first of all, I would have thought that this number would be significantly lower than what it turned out to be. So again, as as as you mentioned, those companies, we we have macroeconomic pressures in general, especially especially towards the consumer market. Where people have less money in their wallet, and we also have a lot of these subscription industries which are kinda maturing.

And and those two factors to me would that would make me assume that less and less people would actually start new subscriptions.

Day to day.

But I think this I mean, this is in in in one aspect, it's continuous for for companies who have some type of subscription service.

Because there's obviously there's obviously new subscribers out there who wanna either get another service or get a new service from beginning, or perhaps switch services from from one provider to another one.

So so that's a positive aspect. I think negative aspect of this is that I would I would assume that these consumers become less and less loyal, and I think we'll we'll get to that later, but especially in in some verticals such as a video, I would assume that brand loyalty and the the customer lifetime values are actually are actually going down quite significantly. And and this could be one indicator of that where you where you see that people keep starting new subscriptions all the time. So So yeah.

Absolutely. I I think there's when you look at broad general statistics like this, it's it's very positive news on an indicator of the the health of the subscription industry, I suppose, and and so on. Right? But I do think it's very important to dig into the details and look at this at vertical level or or industry level or or market level, perhaps even.

Interestingly, near another stat you'll see next week in the report is that nearly half for forty seven percent of respondents actually have canceled zero subscriptions in the past twelve months. And that's the stat that that that also stands out to me.

But but what I but exactly like you just said, you know, that is very different between different verticals and segments. So, overall, half of the respondents haven't canceled or nearly half hasn't canceled the subscription, but in certain verticals, perhaps the same verticals where a lot of new services started, let's say, streaming streaming video specifically, I I suspect that there there there have been quite a few cancellations in all along the way. So those forty seven percent that haven't canceled are likely not in in in that section. So I think it's very important to look at look at this on a more granular level as we go through.

Anything else you'd like to add?

So no. I don't think so. I mean, again, I see this mainly as something positive. There's still growth out there to be fine, to be found. So Yeah.

Absolutely.

So here, we have we have three statistics. Right? To some to some extent, work in in conjunction.

If we start with the first one, perhaps not surprising, although how high it is is perhaps eye opening, but seventy seventy five percent of the respondents are, say, say, that they are more likely to start a new subscription if a free trial is offered. And we've been discussing this quite a bit. You and I, but maybe you wanna comment comment on that first and also the, you know, what actually a free trial list because it's they're all not made the same.

No. Second. So so I think there's sometimes some terminology confusion here around free trials and and premium, premiums, and if it's fixed third, and if it's a continuous trial that they're actually actually subscribing to.

I think, I mean, this statistics in general, it makes sense. Right? Seventy five percent, it sounds reasonable.

I would kind of assume it's to actually be a hundred. But maybe twenty five percent actually feel that secure about the product, but they're subscribing too that they don't even need a free trial to actually subscribe to to it. But And it also depends a bit on what type, again, what type of verticals we're talking about some in in some industries retries are basically a norm right now, so we're talking like publishing, for example.

I mean, a lot of video and and some of the audio verticals have can be moving away for three files, I think.

So so it's a bit different there.

Very interesting. Yeah. I think I think, again, where you have saturated verticals, right, where you have lots of choice.

The risk of trials being abused, if you will, are are greater. Right? So the move away from your traditional seven or fourteen or thirty day of trials that that once that expires, you convert and become a paying subscriber, think in in saturated or highly competitive verticals where there's a lot of choice, that that's likely something that that a lot of companies are are looking at. Changing?

There's there's a big interest rate now in in Sweden. There's a fairly big switch audio book company called Bookbeat, I saw the commercial the other day. They're now doing a ninety day free trial for the audiobooks.

So that's the entire summer, basically, because they want people to sit on their porch or whatever they do in the summer or and and and listen to these books. And and I guess that they bet that this will create a habit and that they will be able to keep the customers, like, after summer.

But it also shows, I think, a bit about how sup saturated that market is, and that they are becoming more and more I wouldn't say desperate, but they are big they are they need to find new ways of getting new customers into the system, basically. And then I think they have to extend this to to these really, really long offers. I think there's a lot of risk in that though. I mean, ninety days trial and they also have probably a pretty high cost in terms of cost for their actual audio if it's being played.

So Yeah. Yeah. And I think, again, it's a it's an interesting one here where where the actual product itself drives certain behaviors. Right?

So, when we when we talk about that space, specifically, it's it's probably less frequent that a user has multiple audio subscriptions.

Compared to, for example, an OTT service or or video streaming service where you you have you have multiple ones. But I think we're we're touching on that a little bit later in the presentation as well. They will save save additional commentary for that.

But the next two stats here, I think, are are quite the first one is clearly in that sort of personalization category. Right? But sixty one percent, so nearly nearly two thirds of respondents.

Said that they're more likely to describe if they actually can choose their own payment date. We picked this one out. It was as a representation of of more granular personalization, but I think that is that that is definitely trend in the in the respondents' answers here. So Kirk you to comment a bit on on that?

So I think, I mean, I I haven't really thought of this before that that could be a personalization option that that the subscriber can pick their own payment dates. I mean, it makes sense. Right?

I'm not sure how much more conversion it would drive or how much more convenience it would actually drive for the for the subscribers, but I think this would definitely be interesting to to kind of test to do to do different checkout flows and see if that could actually drive more conversion if they are if they're allowed to pick the date. I've I've I've done some studies at clients or at companies I work with where where we have kinda shifted the payment date either either technically after they have subscribed or by pushing campaigns in different parts of the month.

To kind of to test if it's better to have the payment date. So for Sweden, for example, everyone gets paid at around the twenty fifth. So is it better than to always have the payment dated like the twenty seventh versus the twenty third? So so, yeah, it's probably because then people actually have money in their in their in their bank account. So But I think it's it's interesting to actually let that choice up to the subscriber themselves. So definitely, this could be something that's that's a new something we will be seeing more frequently.

Yeah. Absolutely. I I think there there's another interesting aspect here. So if you look at our customers, the merchants, the subscription providers, effectively.

There are there can be benefit to have your revenue flow spread out fairly evenly throughout over over a period where that's a month, a quarter, a year, and so on becomes more predictable, and you have a a a a more continuous kind of flow of of revenue in or or cashing.

But from a consumer standpoint, you might want to do exactly what you said, aggregate your bills, so they all come to you at the end of each month. That way, it makes it easier for you to budget you spend, you you get paid, you pay your bills, and you see what's left for for for the rest of the month. Think -- Yep.

When it comes to customizing your own your own payment date, it's very likely more important for higher ticket items. So it could be subscriptions of physical goods, for example, where where your your subscriptions can be in the hundreds of dollars per per month.

As opposed to sort of smaller subscriptions in the ten to twenty dollar range.

But where obviously you're getting kind of maybe physical goods of a high value as part of your subscription. Right? And the the larger the ticket item is, the more important it is that you have. You you you are able to to to to pay for the subscription, of course. And so so that's that that's probably a contributing factor as well.

And the last stat here on this slide, that indicates that seventy three percent of the respondents are more likely to subscribe.

If they get a break on the price for a longer commitment, so an annual plan as opposed to a rolling monthly plan.

I think this is a, again, a fairly surprising result. To me, we usually do a lot of test with clients of ours to see what would so can we increase the total lifetime value of the subscriber by offering a longer longer term subscription.

But usually, what happens then is that you you kind of destroy the ARPU a bit, so so the customers to pay less per month. But again, you lock them in on a on a longer period of time, so that's really good for retention.

I think what we've been seeing is that, kinda contrary to this actually, that it's it's usually a bit more difficult to actually sell a a long term subscription service. Right? So the longer period you have, the bigger commit it meant it actually feels for the subscriber, so that can produce a downturn in conversion if you focus a lot on again, it will you'll have an increase on retention instead.

But again, this this this is kinda good news. So if if people kind of seem to like to get a lower price to get a longer period. I think that could be good for everyone. I guess it depends on how much you have lower the price. Right?

So I guess that's the key question.

Yeah. Absolutely. And this is actually one of the stats where we saw that that response to the next necessarily one to one match the actual behavior.

So this this is this is something that that that clearly based on the server results subscribers want, but I believe that if it's offered as an option at the point of acquisition, you might want to instead try it out as a monthly subscription, and then maybe convert to or upgrade to or or or commit to a longer period after a couple of couple of months.

So timing of when this is offered is probably important, and I think a reminder to to all of us and our customers is to to really think through the subscription journey. So it's perfectly okay to start at the monthly subscriber, easily be able to upgrade to to a to, let's say, an annual plan instead. If if that's if that's dialed in right from a financial standpoint.

But then what happens after that year? Is it naturally that you now want to renew for another year, or should it go back into a default of a month rolling again, or or should you try to look for these, like, larger conversions at you know, at the end of the period. There's also some compliance things to consider here, and no subscriptions you need to communicate differently to subscribers as well. So so lots of lots to think about here, but it's it's an interesting stack for sure. And and I think I was gonna I think you you you need to do that from a compliance perspective. Don't think a lot of companies actually do that. I think that's something that's ahead of the fact.

It's been recommendations in certain markets and jurisdictions, but they are coming due as law.

So so that's something that we worked quite a bit on on the on the platform side to make sure that this automated if you use recurly, that these these notifications go out. And it actually it's it's quite complex. It's also different even for different card brands at times in different markets and so on. So if you have an international business and you take a wide variety of of payment methods.

This is definitely something to to to to be on the lookout for in in an area where we actually And if that's something that the industry hasn't really understood yet, what type of legal and compliance changes that I think will come quite quickly in terms of how you can how you can have different term lengths and and different periods and what type of notifications you have to do.

Because currently, I mean, a lot of a lot of subscription companies, they they wanna get people in on the on the yearly on the yearly subscription to get its medical retention. And, honestly, some you will always count on that, like, some subscribers might might forget about this, and and then we just keep taking money from the account.

But again, there will be a lot more in terms of forced notification for these type of mechanisms, and that will kind of end the ability to do that type of campaigns and those type of peer links.

Yep. Yeah. We'll see a lot up in there. Yeah. And and these force communications can certainly also impact actual metrics like like retention on on those longer plants, for sure, by by as a director, effectively.

Great. So so the next one here we touched a little bit on this this before with the difference between streaming video and streaming audio, but one thing that was clear from from our survey, which again included the cabin universe, as well as as our customer base. But in the in the group, media media runs the show, so to speak. So What you're seeing on screen here is the top eight categories of subscriptions that were started in the past twelve months.

By their respond by their respondents by the respondents themselves. So as you can see here, at the top, streaming video and streaming audio is is sort of clear frontrunners in in some ways.

Any any anything else that you wanted to comment on first, Jonas, I I have one comment I would like to make in in a little bit. I mean, as you've mentioned, it's quite there are some big leaders here, and again, media or video or audio. It's it's the real big ones. I was surprised because I do a lot of my work in publishing, that type of, like, news media and magazines, etcetera. And I understand that this that was actually a bit down in this list. We didn't didn't make topics.

Yeah. Yeah. Exactly. Right. I think your number just after this list was news and media, but but I didn't make the top eight.

And and and I think there is a there is a few, like, surprising ones here in terms of maybe Number fives of food and beverage, company quite strongly. I think we'll see a lot of stuff happening there, and then consumer goods and retail. I think if you look at that market in in particular, sort of like e commerce subscription market, I mean, that has a has a schedule of what, like, twenty to thirty percent or something in the next five years. So I think we'll see a lot of a lot of stuff happening there where I think that, top categories right now, like, especially one or two, they they will become saturated quite quickly because, I mean, most people have an audio subscription now. Right?

Yeah. And the absolutely. And and actually, like I said, we touched on it a little bit earlier, but I think this is a good example of seemingly similar categories, actually, because the products are different and some of the conditions around the products are different. Like you like we said, if you have an audio subscription, you likely have access to, quote unquote, all the audio.

Right? Whereas on the video side, you will have access to the content on that on on one service that that service has the rights for. Right? So you you have to have multiple if you wanna see quote unquote all the content.

Right?

And it's then not surprising that because a lot of new video streaming service, they're still launched. That that and and the question here was subscription started in the past twelve months.

But like we we saw on the previous slide, there's industry and video space compared to the streaming audio space. It's it's very likely a lot of consumers that jump from one service to another and start new subscriptions, which this slide shows, but perhaps also are canceling other ones in in on the back of that. Whereas on the streaming audio side, it will help the very, like, fast growing segment. But but it's it's unlikely that you you have multiple subscription or audio subscriptions of the same variety So you might have a music one and an audiobook one, but but unlikely to have multiple music ones for example.

Or less likely than with video for sure.

I mean, we might also see let's I mean, for streaming audio, we I mean, there's dominance for Spotify there, of course. I think they have somewhere around thirty percent of the global market share for for streaming audio right now. Second contender being Apple. They have about fifteen percent.

But I mean, that might change as well. I mean, Spotify has been they they were early out. They have a great service. They have have a lot of the content.

There's been some contenders in the past, like title, etcetera. Didn't really work out. But, I mean, we might see those those new contenders as well, and that might kind of shake up that landscape as well, I think.

Yeah. And and both of these sec sec sectors are heavily to rights driven. Right? So that the audio and streaming companies who are our customers, distribute content that that is is governed by rights, of course.

Yeah.

Excellent.

Going through going through the stats here. So the the next one is around questions around how to communicate with with subscribers on your on your platform. So here we saw that about half of of the respondents prefer email the main communication channel, which is, to me, a little bit surprising, but email still works. And that twenty seven percent wants to hear from from their to the company that they subscribe for to relatively sell them. Right? So, once a month in this case.

I think from a from a marketing growth perspective and also from an engagement perspective, we we actually still see that email is working quite well.

So so some of the more successful kind of campaigns, and and efforts that we are doing to drive new subscribers are actually email campaigns.

And especially then if a publisher or another subscription provider, they have some type of organic database of of email addresses, and you can utilize a good way. It's actually a good way to drive conversion.

So I'm also a bit surprised kind of how well that works, and and that people still tend to like email. I think there's there's been happening a lot of things just the past five years, which are kind of competing a lot with email. So so first of all, in that universe communication, for example, that's really important for those type of providers.

From the business perspective, or from a work perspective, you're seeing, I mean, email is kind of have to moving away for Slack, and Microsoft Teams, etcetera. I mean, I think we will have to understand how subscription companies should communicate in other channels that are actually not just email even though that seems to work right now.

And then I think, I mean, twenty seven percent will wanna hear from the subscription companies once a month. I mean, some some of the companies we work with, they send one email per day, and it still actually works quite well.

So so I think there's a bit of a difference what people what people say and what actually what actually happens in reality there. I think, I mean, like we mentioned, why I think communication has irrelevant. Right? It it it it can't be it can't be spam. So No. No. Exactly.

It's a big question from the from the audience here.

If you have any insights around other other communication channels, for direct to consumer businesses often, they have apps that they deliver their service in, so in app, text messages, those type of things. Have you have you seeing anything in particular around that. So I think, I mean, in app in app notifications, if if we have that possibility, that's that's usually good. It's also a bit of a actually, bit of a saturated communication channel. I mean, how many outstanding, like, notices or notifications don't you have on your on your on your smartphone right now.

So so I think, like, email tends to actually push through a bit more.

I think there are other channels like, again, text messages, etcetera. I think most seem to be moving away from that because people almost feel that that's a bit, like, intruding into the personal space right now. We get a text message from from your, like, subscription provider. I mean, you barely get a text message from your mom anymore. So so, again, I think email and and in app are probably the biggest in the service notifications.

Yep. That makes great sense. And I think just like you said, I think there are a couple of considerations. Right? So there's a it's perhaps a different style or cadence of communication, if if you have, high consuming subscribers, so people who use your service a lot and are seemingly very happy on your platform and so on.

They are there's a style and a cadence to communicate with them.

But like you said, you you don't have an infinite number of of communications to really make an impact. So you you have to be fairly deliberate and careful about how you communicate. If we look at the flip side of that, if you have customers who are starting to reduce their consumption of your service or or or content and so on, it becomes even more critical that the the messages you send are impactful. Right? And if they are even further along, so they may have problem making payments or or in in dunning and so on, then then, obviously, those messages have a very different style and a very different purpose due in in often to drive successful payment. Right? So I think it it's both situational and and sort of life cycle related almost.

Sure.

Yes.

Excellent.

Moving on to the next one here. So This is, again, certainly squarely in the personalization or the aerial personalization area here.

But sixty five percent of the respondents said that they would that that had recently canceled the subscription said they would be likely to reconsider canceling if they had an ability to customize their plan to to better meet their needs.

And they they customize it can obviously come in a number of different versions. Right? Whether it's pulsing or downgrading or payment choices and so on. But I know you have a lot quite quite a bit to say on on this one.

I think this is a really interesting one. I think this is kind of like, to me, the the forefront of where a lot of work is happening in in terms of how subscription providers should work towards their subscribers.

I think, like, traditionally, if you look at how subscription businesses have worked, they have kind of been like, hey, we acquire a new customer. We try to engage them.

If they cancel them too bad, we'll catch them sometime later, basically. So I think we're now moving into subscription providers seeing that more as a continuous life cycle, and I think especially when competition becomes more fierce in in some sectors when when brand loyalty might decrease, etcetera, that becomes even more important.

And I think, I mean, there's something here, like a lot of the subscription providers, they have been great that doing new campaigns and live testing prices and testing offers, etcetera, in terms of when you get new subscribers, but they haven't really started to do that. Most of them haven't when it comes to actually keeping people from canceling the subscription.

So I think this is like really big next era of making sure that making sure that you keep subscribers in your system.

Yeah.

Yeah. Absolutely. I mean, I think even in our last joined the webinar that we have we had we we introduced the concept of twenty twenty three being the year of retention. Right?

And We are of course, that's that's the macroeconomic pressures are are driving that, but I think generally speaking. Right? We have now a lot of more mature subscription based companies out in the market that that are now no longer start ups or early stage businesses, but have matured quite a bit. And through that, they built up a a really healthy and steady revenue flow from from their subscribers.

They've successfully managed to build these long term relationships, and they've seen all the benefits of this subscription model in in that sense. Right? In in the form of predictable, repeatable revenue.

And they also need to shift over from, you know, maybe acquisition isn't isn't as impactful. It's always gonna be important, driving more interest and new subscribers to your platform, it's always gonna be critical. But in relation to the potentially, you know, tenths or hundreds of millions of dollars that now are represented by existing subscribers, naturally managing those from a retention standpoint is is increasingly important. It it kind of it's it's the good old SaaS model and and how how companies have to to to operate in that.

I think also, one thing that we've seen and that we we discuss a lot with our customers today is the concept of of of customization, where where really is about paying for what you use or paying for what you need. We Again, in our last webinar together, we we spoke about the pay as you or sorry, the all you can eat model that has been so so successful in for for companies like Netflix and OTT services. So all were one low fee. You get access to everything.

But the fact of the matter here is that consumers now and, again, macroeconomic pressures drive this probably as well, but are now deciding between staying in a all you can eat relatively speaking expensive model or canceling and moving to another service, and it's increasingly important to offer a sort of less for less.

Option where I'll pay less, I'll get access to less, but that is what I want to consume them because that's what I what I use or or or consume.

Of course, on the flip side of that, there is also very loyal subscribers where you potentially can do more for more offers. But I think here we speak about retention, The less for less should not be underestimated how how important that is to have as part of your repertoire.

But it also is one where it's extremely important to offer that at the right time, not too soon, not too late.

And and be very deliberate about how you construct them and how you offered them out and communicate them out to the market.

Sweet. Super.

I think this is the last one we we had. Right?

Yes. Indeed.

So here, our respondents told us that eighty eighty two percent of them would stay subscribed if they were given, loyalty loyalty incentives of different varieties.

And and not just and it's clear ever important distinction, not just months, but serve on a fairly regular and sort of ongoing basis.

Share the comment.

So I think there is a bit of a it's it's almost bit counterintuitive or at least how subscription providers today work with their most loyal subscribers because I think what what's some or even most of the subscription providers tend to do is to treat the, I mean, the loyal subscribers, they are the ones that really fancy your service or product the most. Right?

That also means that they can pay the highest price for service. So it's almost like you're not incentivizing them. You're actually trying to get more money from them because they like the service so much. It's almost it's almost the opposite of incentivizing. Right?

But I think this will probably change as well. Again, economic factors, brand loyalty, etcetera, where you might have to more actively provide some type of incentive to make sure that they actually stay loyal. And there's probably I mean, probably a a pile of travelers here somewhere in the middle, which are kind of semi loyal, and and would still really benefit from getting something on a continuous basis to to make sure that they they stay loyal. I think it's important there, though, I mean, the what's what what the main driver of loyalty is through products.

And service. Right? And what you offer what you offer around that, that will always be a bit artificial, I think. So I think that is important to be able to offer those type of incentives, but they will never they will never be substitute of poor product, for example.

So I think that's just important to keep in mind as a as the marketer as well.

Now great point.

That's I think the core product and the core business needs to be the thing that retains customers ultimately. But turning this a little bit on on its head, we've seen some really great example I I share one here in a second, where you can actually use the subscription construct to drive to drive loyalty in a brand.

In brands that perhaps don't have subscription as their main business model. And and the example I wanted to give was around with specifically an online grocery store, where they now offer up paying or buying buying groceries online and having them delivered.

To your home instead of going to their their brick and mortar stores and and and buying their groceries there. So there's obviously a ton of this, very competitive space, quite saturated, lots of options, and and so on.

But here we see a very interesting example. And and actually, the impact or the positive impact that it was not in subscription revenue, directly, but actually in repeat purchases and in in overall sort of loyalty to the brand. Right? Again, opposed to to picking one of one of their competitors.

So the challenge here or or rather solution actually. I'll jump straight to that was that One of the key things when you make a choice is a customer in these areas is when you get your groceries delivered. And almost everyone offers for premium delivery times. So these are usually right after work.

That's where you want your deliveries to happen.

Often, you can buy these for an add on fee, so you you get access those, but now you now you pay a delivery fee, and and they're often fully booked. So you you you you can't access them. So this customer created a a subscription that was they had a few other kind of entitlements in it, but the the main thing was that it gave you access to these short premium delivery times. As you one, had kind of dibs on them, so you, you know, you you they were available to you.

And two, they were free to select because obviously you paid for your subscription, but free to the subscription itself was very low. It's, like, around five dollars a month. So the revenue driven from this was was certainly dwarfed by, you know, basket purchases or groceries on a weekly basis often in excess of a hundred dollars. Right?

So the revenue was not the key thing here. Sorry. Now, we're seeing two screens on the screen here.

I believe.

Maybe something to check.

But but, anyway, so so this subscription for five dollars a month gave this incentive and gave access to to these premium delivery times. And this they saw an pretty incredible uptick in repeat purchases and effectively loyalty from subscribers. And when surveyed, subscribers also said that, well, you know, I am paying for this on a monthly basis. So I wanna take advantage of it.

So a lot one particular condition of of this space is that a lot of these grocery stores offer exactly the same brands. Right? So you can buy, your basket wouldn't look more or less exactly the same between them. But so so it's very easy.

You have a lot of choice and easy to to jump around. But it's something as simple as, you know, paying five dollars a month made you feel like you were invested in in particular brand, then you wanted to leverage and get get get value for your money there, and that drove this pretty significant uptake in in the loyalty disposed. So it's pretty pretty interesting effect on subscriptions.

Yeah. There's a lot of interesting psychological effects in in in there, but I think that I mean, that works. Right? So I think I think it's important to capitalize on it.

Absolutely. I think we've gone through the the stats that we wanted to to dig into a little bit. Again, the report will be available on the twenty first, and we'll make sure you you you get access to that, of course.

But but no QR code to to download just yet. But obviously, you can connect with Jonas or or myself.

Cure codes on the screen here, and I would like to thank you very much for for joining the session today. Hopefully you found it helpful. Any last words, your last I know it has been I think to me a very interesting discussion at least, and it will be interesting to see the report when it comes out next week.

Yeah. And then we'd obviously always encourage feedback and communication and so on. So for those who attended. If you have questions or commentary, you want to learn more.

Either right now, or or once the report is out and you've digested that, we we would love to hear from you, and and continue conversations. So thank you very much, and have a great rest of your day.

Thank you.