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Exclusive benchmarks and trends from Recurly’s customers such as Twitch, TIME, Sprout Social, FabFitFun, Paramount+, and Sling from 2022
The importance of subscriber insights and understanding the health of your business–do you have all the data you need to make the right decisions to grow your subscription business?
The complete ins and outs of the subscription business model’s most coveted topics: acquisition, payments, subscriber growth, and churn, plus a breakdown of each category’s biggest impacts on the subscription industry
A look into the future: 2023 subscription industry predictions based on subscription economy trends. What does the ever-changing world of subscriptions mean for the coming year and how should your business respond so you don’t fall behind?
We answer all of that and more in our subscription trends and prediction report. Download it now by filling out the quick form.
Our official subscription economy report of 2023 reports on the subscription management and recurring billing trends and growth metrics of more than 2,200 Recurly merchants and over 65 million active subscribers. Broken down by industry, geography, merchant size, and more, The 2023 State of Subscriptions report is a collection of trends, strategies, insights, and predictions that you cannot find anywhere else.
In 2023, we predict that the ever-changing subscription landscape will continue to evolve–but it’s happening in ways that demand your business to pay attention and step up to the plate:
A focus on cultivating subscriber relationships
Creating the optimal acquisition environment
Offering customization to increase customer LTV
Prioritizing payments as a growth strategy
Ensuring operational efficiencies
To learn more about how to achieve each of these needs, download our 2023 State of Subscriptions report. Now, let’s dig a little deeper into each of the chapters.
Without subscriber insights, your business simply does not have the information it needs to run a top-tier, competitive subscription business model. You’re lacking the data you need to thoroughly understand your subscription products or services, marketing efforts, and most importantly, your subscribers.
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The Recurly benchmarks in this report have led us to a few conclusions (more on that later), but one of the most prevalent findings is that consumers have a strong appetite for personalized experiences. Using insights, businesses can tailor their offerings and experiences to meet the demands of their subscribers.
Subscriber insights inform strategic decisions that determine the course of your business and long-term success. More specifically:
Insights paint a comprehensive picture of which subscribers churn and why, allowing you to optimize areas to reduce churn rates.
A more enjoyable subscriber experience encourages loyalty, increases customer lifetime value, and ultimately boosts revenue growth.
There is no one-size-fits-all formula when it comes to the best subscriber acquisition strategy. However, our subscription economy trends report highlights key findings from Recurly merchants that will lead you to a smarter strategy in regard to free trials, coupons, gift cards, and gift subscriptions–key elements for players in the subscription box industry.
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While there was a slight decline in the number of trials started and the average conversion rate from trial to subscription, the motivation behind each of these acquisition tactics is clear: Consumers are more likely to try new services if they include a new customer discount or trial.
While some niches have conversion rates higher than 50% on trials, consumers want a variety of options when it comes to keeping money in their wallets. If you’re opting for free or discounted trials, try these tactics:
Offer shorter trials (seven days or less) that still allow consumers to experience the best of your product or service.
Coupons and promotions can easily be paired with trials to create incentives to convert. At a trial’s end, offer a coupon code that discounts their total for the first month or suggests an annual plan to save more in the long run.
Payments are an increasingly popular factor in every subscription business model growth strategy. Without a thoughtful payments approach, you are forgoing innumerable opportunities to convert revenue-generating subscribers. With a deep dive into preferred payment methods, decline rates, alternative payment methods (2022’s hottest topic), currencies, and churn based on payment methods, our subscription report can set you up for a fruitful year.
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The most popular payment method by far, debit cards account for 52.9% of global transactions in Recurly. Credit cards follow with 26.7% of total transactions, and PayPal is the third most popular payment method overall and the most popular APM worldwide.
When broken down by Recurly customers by continent, consumers in Africa, North America, and Oceania make most of their purchases with debit cards. In Europe, PayPal is the most popular payment method, while credit cards are used in the majority of transactions in Asia and South America. Like the most popular payment methods globally, the second and third most used payment methods by continent are also credit cards, debit cards, and PayPal.
Increasing subscriber lifetime value is critical to the success of any subscription business model. Understanding how and what to change in your subscription plans, subscriber lifecycle communications–especially dunning emails–and plan add-ons can make or break your acquisition and retention efforts.
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In 2022, Recurly merchants sent over 70 million dunning emails. Businesses in the B2C sector like Digital Media and Entertainment (60.2%) and Consumer Goods and Retail (16.9%) use dunning emails the most as churn levels are highest when the monetary investment is lowest, such as with consumer purchases versus business transactions.
Dunning emails have helped Recurly merchants recover $214 million in revenue alone in 2022. On average, Recurly merchants generated $3.01 in revenue per dunning email in 2022–this is a tremendous return with minimal incremental cost that Recurly has automated.
If you’re like most subscription businesses, especially those in the subscription box industry, minimizing churn is a top priority. In our churn chapter, we break down average churn rates, at-risk subscribers saved, recovery events, and the impact of it all on your business.
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Recurly monitors and actively reduces churn–especially before it happens. We track every event where Recurly’s technology actively prevents churn from recurring. We call this a “recovery event” and measure how long a customer stays after a recovery event.
Overall, subscribers who were saved after a recovery event stayed active for an average of 329 following the event. In B2B environments, this number changed to 444 days, while B2C companies experienced an additional length of 317 days. The subscription industry with the longest extension is Software with 400 days, and the industry with the shortest extension is Healthcare with 261 days.
Don’t head into 2023 without the necessary subscriber insights and data for subscription success. The subscription business model is demanding but rewarding, and with Recurly’s 2023 State of Subscriptions report, you’ll be ready to tackle it all. Download The 2023 State of Subscription report today.