Brightback, which offers automated customer retention solutions, wanted to learn more about how subscription businesses retain customers so it tapped more than 300 c-level executives and founders across 28 different industries to gain insights.
And while the firm found that 97 percent of those polled said customer retention was a top priority, the “initiatives, challenges and tools differ” among respondents based on whether they were B2B, B2C or B2B2C. Still, the researchers said businesses can deploy successful retention tactics regardless of business type.
Millions of consumers have various subscriptions — from online media to beauty boxes delivered to one’s home, the subscription industry is large, and growing. According to Hitwise, web site visits to subscription box sites have grown more than 20 percent this past year. But as the industry matures, retention becomes more critical.
“Subscription businesses are facing immense pressure to grow,” said authors of the Brightback report. “They’re employing strategies to acquire customers faster than ever before. But what’s the plan to keep customers paying? Until recently, retention has taken a backseat to acquiring new subscribers. That’s changed.”
And while retention was cited as a top priority by respondents, the Brightback researchers found that “only one in four subscription companies are growing more than 30 percent year-over-year.” The survey also revealed that 44 percent of B2C respondents “feel retention is prioritized appropriately within their company compared to 68 percent of their B2B counterparts.” The authors of the report noted that “B2B companies prioritize customer education, while B2C companies focus on support.”
In regard to customer engagement, the research showed that “B2C companies are twice as likely to offer bundles or special deals preemptively to at-risk customers than B2B [58 percent versus 26 percent].” And B2B business were more than twice as likely to test different types of discount offers at the “point of cancel” versus B2C companies.
With retention, the survey revealed that the difference between business types is the timing of executing offers. “B2C companies are twice as likely to offer bundles or special deals preemptively to at-risk customers, while B2B companies are more than twice as likely to test a range of discount offers at the point of cancel,” authors of the report said.
“B2B and B2C companies have the opportunity to further implement each other’s top tactics,” researchers stated in the report. “B2C customers may like the opportunity to pause their subscription while B2B customers could be given the opportunity to inform organizations why they’re leaving.”