Alright. Howdy, everyone, and welcome. Let me introduce myself real quick. I'm Tony Brown, senior director of technical support here at Recurly, and I'm I'm thrilled to be the host today.
So what's on the agenda? Today, we're planning on discussing what makes the European subscription market unique, From subscriber expectations to the latest trends in retention and growth, we'll be exploring how businesses can thrive in this dynamic landscape. I'm personally excited to have two great friends of mine and genuine experts in their respective fields, Mary Roseberg and Jeff Sheldon. Welcome, guys.
Okay. So let's kick things off with a quick intro from each of you if you'd be so kind. Mary, let's start with yourself. Could you tell us a little bit about your background?
Sure. So my name is Mary Roseberg. I've been with Recurly for twelve years. I've been in subscriptions for about fifteen years.
Very excited to have this conversation. My subscription background comes from helping companies grow, so companies like Twitch, like Paramount, a lot of different global brands.
Yeah. Yeah. Happy to share all of that. Awesome. Jeff?
Hi, everyone. I'm Jeff Sheldon. I'm chief architect at Recurly. I've been with Recurly for over ten years working in commerce, retail technology, and payments for over twenty five years now. So, excited to, have this conversation and really dig into some of the, challenges, expectations, and experiences of the European market.
Awesome. I can't think of anyone better to have this conversation with. So let's let's knock on. So, let let's start with a big picture thought. I'm thinking European subscriber expectations.
How do you think these differ from the rest of the world? Jeff, maybe you could answer that.
Yeah. So, you know, to start off, I think it's a little easier to to frame that in in how they're the same. So I think consumers globally are really looking for that no friction experience. They're really looking for something easy, something, that's not gonna get in their way. But even more so when we look at the European consumers.
European consumers are even more sensitive to friction, especially in the checkout flow. And a great example of this is looking at payment methods. The expectations of payment methods in the European market are very different than what you would see in the American market or South American market or the Asian market, really focused on things like bank transfers, SEPA, ideal, direct debit over credit card, debit card over credit card, all of these types of things. So we really see a lot of those things making a huge difference. Then if you're not offering those payment methods, if you're not allowing people to pay the way they wanna pay, they're more likely to drop and go take their, pounds or euros or what have you somewhere else.
Okay. So it sounds like there's a lot of focus on making the experience personal for each market. Mary, what would you say are the top priorities for European subscribers? Are are they more focused on price? Is it convenience, or or is there something else?
So when I think about what European subscribers want, Recurly just did a report called what subscribers want. Part of that was focused on Europeans only.
The answer actually wasn't very surprising to me. It's value.
Value trumps everything, and it's not just about value with price, but value in terms of flexibility, of reliability.
All of that comes into the value play. So, again, not surprising to me at all. Who wants a subscription that doesn't provide value? Right?
But it really stood out for Europeans. So when they look at value, they look at flexibility. And when I think of flexibility, I think of from the from the company side, what are you offering that is gonna make it more flexible for the consumers in Europe, which will therefore make them trust you more and make them more of a long term customer. So for me, it is all about that long term play and flexibility drives that, whether it's building trust by offering the ability to skip a delivery. So something like a HelloFresh, you get a meal, you wanna skip it sometime.
Something like Kahoot gives you the ability to downgrade so you get let's see. Get into with one subscription. You have the ability to downgrade to a lower level that might cost you a little bit less. Those gestures of flexibility give subscribers the feeling of control, which gives them the feeling of trust in your brand.
Yeah. Yeah. That idea of flexibility is really interesting, and it it leads us perfectly into the next topic, which is pausing subscriptions. And you kinda touched on it there, Mary. Jeff, it's it's gaining a lot of traction lately. I'm a good cause. Can can you maybe tell us a bit more about this?
Yeah. So, you know, we've heard a lot the past several years about subscription fatigue and that that people are having too many subscriptions and leaving subscriptions at record rates. But what we're also seeing, if we really look into the data, is that people have more subscriptions than ever. So I think subscription fatigue is maybe the wrong way to look at this. What we're really seeing is a a shift in how, especially younger generations, view their purchases.
You can see this beyond just digital goods and and physical, buy and save, you know, subscribe and save offers. You see this in homeownership, more people renting than owning. You see this even in, cars, more people leasing than buying cars in the past.
I I couldn't agree more, Jeff.
Like, that topic of subscription fatigue always makes me think, is it?
I mean, but it really more subscription. When was the last time you bought a CD? Like, what, for Lotus one two three? Maybe you bought a CD then. It's been a long time since I bought a CD even for music.
Yeah. So what we're seeing now really is managing your subscriptions is becoming an extension of how you manage your finances, that you're going to have a large number of subscriptions and varying needs, whether it be how you use subscriptions or varying financial conditions. You may be maybe you're going through a rough patch. Maybe, you know, you're you're waiting for that next bonus to come through.
Whatever your situation may be, it becomes important to be able to to really manage that subscription profile and and what am I subscribed to, what am I not subscribed to. And what we noticed is this was already happening in the marketplace. We would see droves of people canceling their subscriptions, resubscribing later. You hear about this all the time.
Everybody knows a friend on a streaming service. The show that they love stopped. They canceled.
The next season came back. They resubscribed.
And what we've really found is there is a way to address that, and that is the concept of pausing subscriptions.
So we've seen pause explode. So sixty eight percent year over year, in general in digital media, we've seen it jump over three hundred and thirty percent. And this is really key because what we're seeing is that forty percent about forty percent of subscribers who pause end up reactivating later. So pausing subscriptions is not revenue that you're losing. It's revenue that you're retaining.
So many of those people, you're giving them that flexibility that they crave, and that is going to keep them on as loyal customers for longer. It's going to reduce those acquisition costs that you may need to go pay to reacquire them, and it's gonna streamline their ability to come seamlessly back into your platform at a later date when maybe they're more ready for it, their situation's changed, whatever the specific circumstances may be. So that's a a huge trend, globally, but also especially within Europe. It's been happening quite a lot.
Some other great examples, you know, we had a, we recently had a customer that moved from cancellations to pause. It put five million euros into their pockets annually. So we're seeing huge, benefits.
And then, especially getting can't collecting information when people pause, understanding why they pause, and then figuring out how to tailor tailor your messaging, tailor your product, to help support those customers, that's gonna drive those numbers up even further. So some some great evidence from the field that we're seeing. And and pause, I I would say, if you if you take nothing else away from this report, from all of the data that we have available to you, it it really should be that pause is a tremendous opportunity to grow your revenue retention and further build that loyal customer base.
Yeah. It is, it is a hundred percent a no brainer. I I do not understand any subscription that is not offering pause today.
Perhaps you have a really good downgrade path for people, so you don't think you need to offer a pause, but pause gives that feeling of control. So when we come back to that concept of flexibility, personalization, long term value of that customer, any place that you can have a transparent conversation with your customer is gonna benefit your brand, is gonna benefit your long term revenue. If you look at the moment of cancellation, which leads to the offer of pause, right, or even at the moment of pause, having the conversation to draw out why, you're gonna find information that's gonna inform your campaign for how to reactivate them. In other words, how to make sure that they come back. You're also gonna find information and give information that is going to, again, increase the trust through more communication.
Right?
Yep.
That that that's really not a great one.
Yeah. Really, really insightful. I think that that data is powerful, Jeff. I think it's it's easy to underestimate the power of this type of flexibility.
So yeah. Yeah. That that's really important that you share that with us today. Now we've been talking a lot about loyalty and retention.
Mary, do you think there's gonna focus on loyalty programs in the subscription space?
Could there be a a missed opportunity here at these It's a total missed opportunity, Tony.
It it completely is. It's sort of like the company that are on our offering pause. What are you thinking? So with loyalty programs, you think about the European consumer that has, you know, on average, twelve subscriptions, roughly.
Sadly, I have more. But when you think about that, you think about how many are actually offering loyalty perks. So what we found is that consumers desperately want loyalty perks. And I'll talk a little bit more about what kinds of perks, but they really want loyalty perks, and yet only thirty percent of their subscriptions are offering loyalty perks.
Right? So huge gap there. And when we talk about loyalty perks, we come back to that statement that we started with, value. What's the most important thing to European subscribers?
It's value. Same thing with the loyalty perks. The loyalty perks need to be valuable. They need to convey a feeling of exclusivity, a feeling of flexibility.
One good example for me is there's an airlines that I fly frequently, and the perk that I like best is I'm automatically registered for an upgrade should one become available. That gives me that sense of exclusivity that I really want from a loyalty perk.
Less so if it's something, you know, cheesy promotional. It's it's x holiday and we're gonna give you a free beer.
It it's okay. I I won't say no to the free beer, but it's not the loyalty perk that drives me to come back again and again.
Yeah. I couldn't I couldn't agree more. It's not just those those discounts that they're offering or those one time things, but it's really creating that long term value. Wonderful, Mary. Thank you. So going off of that, Jeff, do do you think there's a a trend or a common time frame we could look at when European subscribers tend to cancel? I I ask because I'm thinking how can businesses work proactively to prevent that churn, do you think?
Yeah. It's it's definitely something you need to look at throughout the entire life cycle of any customer.
But especially in that first twelve months, that's when your customers are most at risk. That is that time when you're really looking to earn that loyalty, and that's when we see sixty six percent of cancellation happening. So, you know, two thirds of the cancellation that you're getting, you're getting in that first year where you haven't really completely proven your value. You haven't completely built that loyalty.
You're still having that initial conversation with that customer. And that's where, you know, we see a lot of different tools coming into play to help with that. One really big one right now these days is AI. There are a number of different AI tools that are great for analyzing this data, understanding how to cohort your customers, who is gonna be sticky, who who is at risk of leaving.
We have some brief insights available from our Compass AI assistant, available inside our application. Makes it very easy to get out some of this.
But, also, once you understand sort of who are your sticky customers, who are your loyal customers, who are the customers that are gonna make it past that first year, and who are those customers who are at risk, maybe have one foot out the door. You know, maybe they're that that friend at the party that's eyeing the exit all night looking for that chance to to step outside and and never be seen from again. You know, once you can identify those, we've got a great tool in, Recurly Engage, which allows you to really, put messaging in context, grab those customers when they are most, ready to be influenced, and encourage them to take the behaviors that make them those lasting customers and really build that long term retention, really fight the voluntary churn before it happens.
And we've seen a, elearning customer in the UK do exactly that. They were able to cut their early churn rate by twenty five percent, And that's that's material to anybody's business. Like, that is an enormous result. And so, you know, really, anything you can do to invest in that to to help people find the value that Mary was talking about to to really bring that in and educate your customers about what that value is, remind them of why they signed up for your product in the first place.
Those were all big wins.
Yeah. Yeah. I love this idea of getting ahead of it. Great insight, Jeff. Thank you very much.
So we've touched a lot on the watch in terms of subscriber needs. But what about the how? When it comes to localization beyond just payments and currency, how deep should companies go?
So localization is a is a fun one for me. I used to work in the translation space. So when I hear the word localization, it's usually loaded with things like, oh, changing the code, changing the website, changing the language.
But for me, localization is much more than that. It it really it kinda bleeds into the topic of personalization, which we've already been talking about. I would say offering the right payment method is one hundred percent table stakes. Again, it's a no brainer for me. You've gotta be offering the right payment methods. That's just of course.
Sort of like, if you're offering the wrong payment method, you're not gonna convert me. I don't like ACH personally. I'm the United States subscriber. If you offered me only ACH as the way to buy, I am out.
That's just it's not happening for me. Similarly, somebody in Germany might be like, if that isn't there as the option, I am out. That is how I would like to transact with you. Right?
But beyond that, it's how and when. So back to what Jeff was saying in terms of engaging at the right time, how and when you communicate is part of localization.
It's part of saying to a Spanish speaker versus a German speaker versus a Japanese speaker, We're having an issue with your payment method. Here's what you're gonna lose if we do not correct this issue. Right? So, again, teasing the value, reminding of the value, and communicating in the way that the people want to be communicated with is super important.
And the when is important too. So coming back to Jeff mentioned engage. So it's the ability to place a message inside the experience. So right inside the app, right inside the website at the right time, present that message that provides relevance, is related to the exact event that's happening right then and there, is targeted to the right cohort.
Again, to me, localization is again more than just language, but around cohorts as in the way different groups of consumers behave.
Yeah.
Does that make sense?
Yeah. Absolutely. It's personalization is just just a key theme across the whole thing here.
For sure. And, I mean, AI is part of it as well.
AI, I think, is table stakes at this point. You should be leveraging it. Your your vendors should all be leveraging it leveraging it for you. I'm looking at AI in, I would say, about seventy percent of the tools that I use all day long all day long, on top of AI solutions that are separate from those tools.
When I look at the kind of reports that I see in different tools or were currently included, I look at an analytical report of data, and the first thing I say is, so what? Always. I say, so what? Great information.
It's telling me something. What's the next step? And AI is what is bridging that gap for us. AI is then saying, this is the so what of the data I'm presenting.
You've got an issue here, and this is what I think you should do about it. In fact, let me help you. Just click this button. I'll do it for you.
What a great age to live in. Right?
Absolutely. Preach. Preach. Preach.
On on that personalization, theme, I'm gonna ask, and I'm I'm a European myself, so I think I know the answer. But but are Europeans more demanding, particularly when it comes to data protection, trust, transparency?
Yes, Tony. You are more demanding.
I know that.
But Yeah.
This is a this is one of those great areas where Europe in general is so far ahead of the rest of the world in privacy and data protection, and and it's a great thing. And so we're you know, the it's more than just regulations. It is the expectation of each individual consumer. People take their rights under GDPR very seriously.
And they wanna know how is their data being collected, how is their data being used. And that's why it's so important at, you know, Recurly for us to provide our customers with those tools to not only manage that data correctly, but to be able to communicate to their customers proactively. How are we using your data? What data are we collecting?
How can you get your data from us? How can you have that data removed should you choose to do so? And so that's that's a key part of building that trust, not only between you and your consumer, but between Recurly and our customers. And so that's why we see, a lot of, merchants across Europe trusting us with their customers' data, because, you know, we we share that understanding, and we share that value of that consumer privacy.
Yeah. Absolutely. That's that's, good to hear. Jeff Jeff, have you got any examples of recurring customers thriving in Europe, that you'd like to share with us?
Yeah. You know, a few that I can think of off the the top of my head, You know, we've got, CitizenM. That's a great example. You know, Mary was talking about perks and the right perks and very much aligned with her airline example. They offer room upgrades and and exclusive access to to inventory. So that's a that's a great perk for a subscription to a place where you don't often see subscriptions in that hotel space.
Another great example is enthusiast gaming. You know, kinda we we talked about reducing churn earlier. And, you know, they're offering, some exclusive discounts before before leaving. So if people do decide that they wanna cancel, they're given that opportunity. Hey.
We can give you a discount if you wanna give it a little, you know, another try. And and that can help especially in, you know, some of those times where where maybe you do have too many subscriptions and and maybe you are eyeing your finances a little bit. But they saw a fifty percent cut in monthly cancellations just by offering that discount, which is absolutely enormous. So there are some great examples of where, customers are are really thriving and thriving through offering these loyalty incentives, these, personalized perks, personalized discounts, really bringing, you know, using their data to understand their customers and bring them the right offers at the right times.
Wow. That that's that's impressive, Jeff. So so looking ahead, and given the breadth of both of your experience and expertise, if you were to leave us with a final message around what European subscription businesses should focus on, over the next twelve to eighteen months, what would it be?
Well, value is gonna be a given, so let's take that off the table. Values it has to happen. I would say flexibility. So giving customers that feeling of control is absolutely critical.
Localization slash personalization as in give the right kind of payment methods, the right messaging at the right time. And then it's it's gonna sound really obvious, but AI.
Please leverage it. Plea please please be leveraging it. Please take advantage of the time that we live in today and use AI as the competitive advantage that it currently is.
You know, I I think you you nailed it spot on. Ai is huge and is, improving every day, and it is so powerful in in what it can do and the insights that it can bring you and and also help you to, you know, better serve your customers, better, target customer cohorts, identify the people who are at risk, and then really leveraging the tools available, levering leveraging customized offers, customized messaging, capabilities like pausing subscriptions to retain customers. You know, the these things are absolutely huge, and there's so much data that is offering group points of where the the value lies for your business. You know, this if you're not taking advantage of these things, that is just money you are leaving on the table.
Yeah. Yes. Sage advice from both of you as always. Thank you very much. So there we have it. I'm sure you'll agree that was was a super enlightening conversation.
And I'm thinking if there's there's three things we wanna take away from this. It's one, European subscribers prioritize value and flexibility.
Two, pausing subscriptions is a powerful retention tool. And three, Jeff, localization and AI are crucial for long term growth.
So, Mary, Jeff, thanks a million for your time today. We invite all of you, to join Recurly at our next virtual program, subscription sessions, on September the twenty fourth to dive deeper into pricing strategies, donning optimization, and and much more. Finally, thank you for your time today. Let's get ahead of what's next.
