Nope.
Hello, and welcome everybody. Thank you so much for joining Cinnamon and myself.
We've got a lot of people coming in, so we're gonna give everybody about another sixty seconds.
So sit tight, and we will be right with you.
Hi, folks. We're just letting everybody join and get online here. So we're gonna start in just a couple of seconds. Thank you.
Alright. We're about two after the hour. Thank you all so much for joining us on this lovely Thursday. I hope everyone is staying cool and having a great week.
I am so thrilled to be presenting here today. Two of my favorite things. We've got some really exciting consumer research and my co presenter, Cinnamon. So without further ado, we are gonna dive in.
And what we're gonna talk about today, we recently fielded some subscriber research. We'll talk to you a little bit about the methodology. We really wanna understand what consumers want. There is a really meaty great report that we're gonna send to all of you after this, so we're really looking at highlights and hot takes for today.
So we're hoping to get through this and really make great use of the next twenty eight minutes. So without further ado, Let me who am I? I'm Theresa. Hi, guys.
I am the CMO at recurly. And I am joined here with Cinnamon, who's our senior director of brand.
She and I worked really hard to go talk to consumers, get this research, talk to our customers, really understand what we need to know about what subscribers are thinking.
So Who's Recurly? Why are we talking to you about this? Recurly is one of the leaders in subscriber management and billing. What we do is we really help amazing brands, like some of the ones you see here, create profitable subscriber relationships. We love frictionless billing. We love personalization.
We love creating great insights to help you optimize and scale your subscription program.
We we are pretty great at it. So we help our customers grow faster.
On average, our merchants grow about thirty times faster than the rest of the market.
So by really optimizing the subscriber experience and improving overall engagement and flexibility and personalization.
Within that, our customers are able to grow at a great rate, which we just love.
Gross smarter. One of the big reasons that Recurly was started was to solve the issue with payment failure.
Nothing will frustrate a consumer faster than payments issues or a failed transaction.
So Recurley was really started to solve the issue of involuntary churn or failed transactions. It happens for a number of reasons, actually two thousand, in fact, we are the industry leader. In helping you manage involuntary churn last year alone, we saved our customers a billion dollars straight to their bottom line. That's a pretty awesome thing for us to be able to say.
And, you know, we're pretty big. We work with great brands like Paramount and Fabfit Fund, and so we process about a billion dollars a month. So that's a little bit about us. Now let's get to why we're all here. We wanna know more about subscribers.
We know the market is a little crazy right, subscriber experience, macroeconomic trends, some subscription markets are maturing.
So consumer consumer needs have evolved tremendously.
So one of the most important things for all of us to remember, and we're all here to build relationships. Right? That's really what a subscription is. It's a long term profitable, hopefully.
Right? If we do it right, subscriber relationship, and the consumer experience is really at the heart of that. Right? And so we're gonna unpack a little bit about what consumers or subscribers expect from brands like you and their subscription experience.
So who do we ask? We asked more than our spouses and our children. We went out and we talked to sixty four hundred people, make sure this is statistically significant and relevant for everyone because we really wanna put some actionable insights out there and give you advice to help grow your business. We talked to six countries. You can see them there.
Little teaser, we are going to be rolling out the geographic splits for this study as well as generational. So stay tuned to this channel.
If you guys are subscribed to this, we will definitely get those over to you, and there'll be more to come as we dig deeper and unpack this data.
So what did we find? What are the big results? Sign up is the first dates. And then I love to we love to tie the any consumer experience to dating life.
It's an analogy. All of us know, and some of us love. So really, what is sign up? Sign up is the first date.
Right? So what does this mean? It means that you really need to tell the consumer what to expect. They've got really high expectations and demands.
So we're gonna talk about what that means and how you talk up to their demands and their needs. Right? And how you convey flexibility.
There's some really interesting insights in here just about communicating around cancellation and how you communicate around the ability to pause or upgrade, and all those great things. So communication, obviously, flexibility is gonna be key, which takes me to the next point, era of personalization.
So subscriptions have been around for a while now it's no longer new. Most of you exist in highly competitive markets, and consumer demands continue to evolve at light speed. Break neck speed, whatever we wanna call it. So different locations, different generations, different cohorts want different things.
So it's really important that you understand what those variables are. Right? And you have the right system in reporting to really get to those cool cohorts in an important manner. Right?
Because once we build our business, once we find product market fit, we really need to be able to go in there and optimize the business. Both from an operating perspective, as well as customer growth and lifetime value. So we'll talk a little bit about some of the things we can tweak there. And subscribers want rewards.
So this is really neat. Right? We're coming out of the era of acquisition at all costs. We know subscribers love free trials.
We know they love discounts. Right? And it kind of it depends on who they are, what they love the most. But now that we're in the era of retention and personalization, really focusing on what that means.
Right? A subscriber ultimately has they've they've given you a payment vehicle. They've signed up. They've raised their hand.
They say, I wanna be loyal to you. And now they're taking a step back and saying, how are you loyal to me? Right? And so they're really expressing that, and they want loyalty rewards.
They want incentives. They want something great for hanging around.
Right? And continuing to engage with your business whether it's on a monthly or an annualized basis.
Subscribers are kinda picking their heads up and saying, alright. What's in it for me? Right? Beyond your great content or your wonderful product How are you rewarding me for my loyalty?
And that's a natural maturation curve that you've seen in any other industry, whether it's subscriptions, whether it's telco, whether it's kind of anything else that's got a long lifetime value. So with that, I will hand that over to the one and only cinnamon. Sure. Hello, and thank you so much for giving us an hour of your time today.
I want to talk to you about sign ups. Let's just start at the beginning of that life cycle for a subscriber. How can we influence that sign up? Well, the research the survey results indicated that ease of cancel, pause, and payments really are some drivers for that acquisition process and it all boils down to choice.
So when you look at a question that says, what makes consumers more likely to subscribe? You know, it may sound a little bit counterintuitive, and that why we wanted to start here. Right? So respondents indicated at seventy seven percent that they were more likely to subscribe if it's easy to cancel.
But at sign up? Yes. Seventy one percent said they're more likely to subscribe if they can pause the subscription. Again, why are we starting with the end in mind?
Dating analogy. Starting with the end in mind. Right? So it seems counterintuitive. Let's talk about that ease of use across the subscriber life cycle.
That's really what it's about. It's not about when can I pause or when can I cancel? It's more about How are you gonna engage with me in a relationship that makes sense for both of us to get something out of it? So, really, recurly does recommend to its clients that you very clearly communicate that you're subscriber friendly or that you're subscriber first in the approach that you present on day one, at acquisition.
So payment preferences. Again, see, I get the fun slides at the beginning that are a little bit counterintuitive. Right? So why are we talking about payments?
Isn't that just a necessary function of subscription management? Yeah. It is. But it really, really matters.
It is not something to brush off or assume will just happen naturally. Right?
Let's talk about why. It is not easy for consumers to give you their money, and so you need to make that experience as seamless and as easy as possible.
So they want personalization and they want customization. And they want it from payment type to even to the payment date. Right? So sixty one percent of the survey respondents indicated that they are more likely to sign up for your subscription if they can choose their own payment date.
They also really have a strong view on the types of payments that they want to use in order to sign up for your service. So this is a global snapshot here. Right? The top five preferred payments. So PayPal credit card, debit, you know, digital wallet in that payment. But what you're seeing over time and other research that Recurly has done is that those APMs are increasing. In certain demographics, the type of payment method is different based on geographical location.
So while these are absolutely the truth in the top five in the world of those surveyed, The differences are really, really interesting when you start to dig into generational differences and geographic differences. So it's crazy important that you know what preferred payments and what specific customizations your customers want as they begin to customize their subscription.
Yeah. So free trials and exclusivity. Theresa did a great job of teeing this one up. Right?
So People do want free trials. Let's be clear. Research has shown that. Right? But that free trial actually tips the scale toward an acquisition if it's offered eighty two percent to boomers sixty five percent of gen z years.
So what you're learning right? Yes. We like free trials. Yes. We like exclusivity. But again, there are generational and geographic differences.
But from a generational perspective, Gen Zeke cares a lot less about free trials than boomers. But on the flip, look at this. Right? If you offer an exclusive product to serve, something that is very unique to them or unique to that subscription service, sixty seven percent of millennials agree that access to an exclusive product or service will tip the scale toward acquisition, whereas only fifty three percent of Uber said the same.
So again, know your consumer, know their age cohort, know what they want most from you in order to provide that really great subscriber experience.
Starts and stops. Okay, so this slide, I really thought was important for us to include. Subscription businesses kind of take it in the media sometimes recently, right, about the differences and, you know, all the costs, the regulatory compliance, all the kind of pain points But here's the thing. Starts and stops from our survey results indicate that fifty eight percent of respondents had started one to three subscriptions in the last twelve whereas only forty seven percent had canceled.
So this is a good thing, right? It's important to note that fifty six of those new subscription, fifty six percent, pardon, of all those subscriptions are actually starting in streaming videos. So, obviously, that's not really a no brainer everybody on this call. Probably has multiple streaming services, and we do add and subtract as our interest lean.
Right? But out of the forty seven percent that had canceled zero subscriptions, you'll again see those generational differences. Right? Forty two percent of Gen z had canceled one to three whereas thirty nine percent of millennials had done the same.
So again, all of these numbers, we can dig into them for hours only have thirty minutes with you. So we're giving you the high level view. Feel free to reach out to us later. We're happy to discuss the detail.
I think yeah. Now, Teresa is gonna actually talk to you more about some retention. So we've moved past acquisition. We've shown you a few statistics from that. Now she's gonna go to retention.
It's great. And shameless plug if cinnamon talked about free trial payment methods, we launched a report earlier this year. Based on the aggregate recurly data. So if you wanna see what type of trial works best for your business, your price point, if you wanna dig into payment trends globally from our customer, our aggregate customer data.
You can look at that too just send us a note, and we're happy to send that to you, you can, of course, find it on our website. So, what impacts retention, right, or here subscriptions? It is ultimately about the relationship tension lifetime value. How do we improve those things?
There's there's a couple key pillars. Right? And what we're finding emerge now is incentives are super important as people have had subscriptions now for a decade. Right?
In some cases, or five years, or even a year, how do you think about keeping them. Right? We don't wanna do win back campaigns when somebody moves to cancel. We wanna understand the data, and we wanna be proactive.
And provide loyalty, provide rewards, provide incentives, and we'll we'll give you some guidance as to what people are looking for there. Talking about payments as well as price. So what do they want ultimately value, and they're telling us in this research what they perceive as valuable?
So what impacts retention? So the subscribers that we talked to, eighty two percent of them are more likely to stay. If they were given some sort of loyalty incentive. And I'll tell you this isn't a traditional points construct.
Right? When some people say loyalty, you think points. No. It's about acknowledgement and reward in some kind.
So we're gonna unpack what that means. We're not at all telling people to run out and get a points platform.
Honestly, it doesn't work for a lot of consumer subscriptions because of the low dollar value. So we're gonna look at some different levers that we can play.
More likely to leave. So fifty three percent of consumers are likely to leave this isn't super shocking. I didn't get the counterintuitive slides.
Likely to really leave if their payment method had an issue.
Right? So if you ever go somewhere and your card fails, right, it's it doesn't feel good. It's not a great experience and creates a really negative halo for your brand.
So really, if you look at the infrastructure of billing, one of the key components, you need to make sure that your billing experience is as flawless as possible.
Some of the things that Recurly does, Right? We proactively update accounts. Right? We have multiple gateways that we provide our customers. So any controllable reason to ensure that a valid payment is successful, we make sure that we do that right better than anyone So it's really starting. Make sure that you get the basics right in any business, and payments and payment processing is really one of the basics for subscriptions, and it heavily impacts retention.
So if we look at cancellation, right, kind of the the dark side of retention is cancellation, why do people cancel? Thirty four percent because they're not using the subscription. Right? Okay. That's a that's a product that's a product fit that's maybe a stage issue.
Thirty four percent cancel because price increase. And I get it. Right? We all need to look at our pricing and we need to think about it. Especially in today's economy. What this means is if you're gonna increase price, you you better be looking at offering some sort of secondary plan or price alternative so people can access your service or your product in a different way that kind of maintains budget.
Right? So really looking at how you configure your plans and your price as you think through upcoming pricing strategies and make sure you have the flexibility to test.
Thirty one percent are canceling to reduce their spending. Right? So this is also a little bit of the strategy of Let's look at how can we provide something even if it's a lower tier product, right, offering or lower price offering so people can maintain a relationship with your brand. Other things that we'll see, and I'm stealing a little bit of my own thunder.
Right? You need to give people the ability to pause because stuff happens. Right? You go on vacation.
Maybe somebody loses a job. You need to give people the ability to downgrade as well as up when we talk about personalization from an offer level, the ability for me as a subscriber to manage my relationship with you to that level of nuance is just fantastic, and it keeps the relationship going versus me having to, like, cancel and then restart. Right? You don't need to reacquire me.
If I wanna downgrade because, listen, nine ninety nine is all I wanna pay, and you just raised your prices. Let me. Right? So let me kind of pick my package and what price point and what plan I wanna engage your brand with.
That's when we talk about personalization from an offer layer. It's very much what we mean, as well as configuration of product and all that kind of stuff.
We're currently recommends here ramp pricing. So We offer a tremendous amount of promotional levers as well as pricing levers whether you wanna use usage based, meters, metered. One of the really interesting things is ramp pricing. So you can schedule price discounts either as you acquire somebody.
Right? Let's say you wanna start month one, through three at one dollar, and then three through six is five dollars, and, you know, so on and so forth, you can also do this in reverse. We've actually had a number of customers use this, and it's a really handy automated loyalty tool, as if somebody's with you for, let's say twenty four months, and you guys all know your data. This is illustrative.
Twenty four months, if people are going to start to think about churning, or that's an important inflection point in your life cycle, Take that nine ninety nine a month down to eight ninety nine proactively.
Thank you for being customer. Surprise and delight. Right? So you're not doing a win back campaign. You're maintaining and driving consistent lifetime value and customer behavior. Right? It's keeping keeping people there for the long haul.
Cancellation. So let's look a little bit of generational data.
Fifty four percent of boomers, they're much more price sensitive. It makes sense if you think about it. Right? A lot of people are on more fixed incomes.
They're going to cancel if there's a price increase. So being very cognizant of that and specific messaging to that cohort, as you guys are thinking about evolving plans and price, only twenty seven percent of Gen Z said the same. They're less price sensitive. They're more value at invested. Mhmm.
So think through that. And I will hand it back to cinnamon.
Back to me. So cancellation reconsiderations.
Right? So we really did dig into what might offer a change of heart to a consumer. When they go to the site to cancel, what can we do to get them to reconsider that cancellation?
So where we could keep them as more of a long term subscriber to build that relationship over time. Discounts, incentives, upgrades, You're seeing a common theme here. I feel quite sure, but it is about those loyalty rewards.
So what is likely to change your mind? Seventy percent of respondents said that a loyalty discount or incentive is likely to change their mind. Sixty eight percent said they're likely to change their mind if they can upgrade this subscription for the same price. So, these are just a few of the tools that is macroeconomic conditions or market maturity or competitive offers.
Come in to play and really start to start to complicate your business pricing or packaging structure. Let's try some things. Let's try some tools and really alter our mindset about a cancellation to really look at it as a new opportunity to delight and retain our subscribers versus just say, it's a loss, and I'm so sorry about that. They actually are very open to changing their mind.
If they're able to customize the subscription offer to meet their current need.
So if you're looking at another way to cancellation of cancellation reconsideration, again, I know it's such a surprise that geographies and generational differences do matter. Again, know your customer, know where they live, but upgrading and downgrading a subscription as needed is far more important for boomers and less important than Gen Z. So again, it could be a price lever that you can pull, but it is a reason for them to reconsider cancellation.
So when we looked at the data in aggregate, right? We're currently does recommend that you really define those generational needs, not just for acquisition, but for that entire subscriber experience because, obviously, you're seeing now that it really does impact acquisition. It impacts retention, and it impacts their ability to reconsider staying with you over time.
Which we want? Mhmm.
And I think it's back to you.
Yeah. So we're we're getting close to the end here folks.
Thanks for hanging with us. So a great subscriber experience. So, you know, lower price in some regards right to retain discounts, upgrades, what do people want? They really wanna be appreciated.
Right? I love subscription. I love consumers. I love shopping. My husband will tell you that for sure.
And I love loyalty. Right? And what what like, subscriptions is all of that combined. Right?
It's about loyalty. It's about the relationship.
So really, how do you show your appreciation for your subscribers and their loyalty?
So what are the rewards that people want? I mean, This is a survey, so we all know what happens. Of course, people want lower prices, don't we all?
Especially now, I think eggs are like seven dollars a carton. But eighty two percent of people want lower prices. Eighty one percent want some form of discount, right, whether and and you can them all differently. We all know. Right? You can do, like, get eleven, you know, get the twelfth month free.
All get a coupon code, all that of stuff. Right? And there's flexibility. You know your promotional levers, and you know what works with your customers.
A lot of times, what brought them in, right, will kind of keep them. So if you can think in kind, it's another it's another variable to put in your cohort analyses. Eighty percent of people want upgrades. Right?
So we saw that in the data, Boomers would love, I want more service for the same price. Right? That's a great surprise and delight. And you can give it as a limited time offer.
It's like, hey, you're gonna get you're gonna get the premium premium package, or you're gonna get this extra product for six months, that's great. We're gonna communicate to you when the the period is over, and we'll see, you know, if you wanna pay more for it or if we wanna move back to a standard course of business.
So we've talked about four and five respondents want to be rewarded. And what do we recommend? Right? We really recommend look at the mix of promotional tools available, coupons, discounts, gift cards.
Right? There's so many different permutations that you can test and optimize, within your existing subscriber base. So don't just think about these as tools for acquisition. Right?
These become really valuable tools within the subscriber relationship, and hopefully, right, we know our metrics well enough that we know some of those inflection points and we can proactively engage versus reactively trying to win back or reacquire.
So what are our key takeaways?
Great subscriber experience. Right? It's more it's more than, unfortunately, right, hard work. It's more than just a cool product, it's more than just a great acquisition campaign.
We really have to pay absolute close attention to every step of the subscriber experience. You'll see in the report that we'll send after this. Right? There are some really key variables of where to pay attention.
Everything from payment success and payment type, all the way to flexibility and the ability personalize how we engage with your brands from both a product, a plan, a price perspective.
Subscribers wanna be rewarded for their loyalty. Right? So they're giving you their payment. They're saying, hey, listen.
You can bill me again on the fifteenth of the month. They're demonstrating their loyalty, and now they're saying, show me yours. Right? So tell me how you're incenting me, how you're rewarding me if I've stuck around for twelve months, twelve years.
I've been a Verizon customer for twenty years. I don't know what I've gotten out of it, so maybe that's another story to unpack. But personalization encourages subscribers to start and to stay. Right?
So we all get it. Life changes. Things happen. Right? You your kid grows up So you want one service and you need a different you need different types of that.
You go through phases like you love yoga this month, then maybe next week it's Pilates. Who knows? Right? But, like, things change.
People's financial situations change, life stages change, family situations change, where you live changes, let people evolve with you. Right? So give them that ability to upgrade, downgrade, pause, personalize.
Let me add an additional payment method. All of that becomes really important. For people's experience and do it elegantly. Right? That's always the challenge to do it in a really frictionless way.
So with that, right, we're telling you all of these things because we have helped quite a few customers solve a lot of these core business challenges.
We've built a great platform that allows you this flexibility on the offer layer, gives you frictionless billing, gives you the ability to really manage your subscriber experience to grow that profitable lifetime value. So if you need a platform and partner. We've got great technology, but we've got even better people. Right?
We're really here for the data. We wanna share with you best practices. We wanna give you insights. We wanna help you grow your business.
Based on the success that we've seen across tons of customers and verticals and all that great stuff.
So we're here for you. Right?
We will be sending you all the report after this. So if you registered, thank you for attending. We'll be sending out the report. We'll be sending out a copy of this if you wanna, you know, watch it on your Friday night with some popcorn. That's great or share it with your coworkers.
Thank you so much for attending. We will have an additional version of this by generation, so we're gonna do a deep dive into generation and then geo. So those will be coming up as well too. So we wanna continue to give you guys great insights to help grow your business. If you have questions, things that you'd like to see on the next research study.
We really try to do this on a regular basis. Please just feel free to give myself or cinnamon a shout out. And, again, thank you so much for your time, and have a wonderful day.
Thank you.
Bye, guys.
