When it comes to your company’s success, you have every reason to be choosy.
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Reposted from StreetFight Magazine. Authored by Shawn Stacy | Chief Client Officer at Alorica
The value of the booming subscription economy is expected to hit $275 billion globally by the end of the year. Subscription-based business models are taking off in large part because of their recurring revenue, providing brands with ongoing cash flow and creating better visibility into future earnings. But another key advantage is the opportunity to increase the lifetime value of customer relationships by driving upsell or cross-sell opportunities.
What brands need to do to maximize the value of subscriptions is deliver—and differentiate themselves—on exceptional customer experiences (CX). This includes real-time support and service to meet high demand while furthering customer relationships.
Here’s how brands can connect more deeply with their customers and empower customers to get the most from their subscriptions.
Don’t take the “guaranteed” revenue stream for granted by failing to innovate and offer more compelling value propositions. Successful brands recognize that subscriptions only work if the entire journey is orchestrated, from the types of products offered each month to all the communications and interactions that occur in between.
Oftentimes, companies focus more on prevention (tactics to not lose subscribers) rather than retention (tactics to further engage subscribers). Although the two ideas are similar, the latter centers on being easily accessible and visible to consumers, giving them solid reasons to stay with a brand and potentially buy more. To accomplish this, companies need to unlock omnichannel functionality—activating text, email, social, and voice all at once—to create various avenues for customers to connect in real time.
They should also proactively reach out to customers to measure their ongoing satisfaction—a perfect chance to promote other service offerings. Customer outreach efforts can also help generate better CX. A deeper understanding of what customers want can result in more personalized recommendations, easier sign-up processes, and customer-driven investments to improve overall ROI.
Winning customers over through retention tactics requires brands to implement a proactive CX strategy, one that not only engages audiences on their favorite channels but also tailors each and every interaction based on the individual customer. If a company’s touchpoints are limited to the routine shipping and receipt of each monthly subscription, then they are missing out on critical data points that provide insights into customer behavior and preferences. The intent is to gain your customers’ trust and confidence in your brand by understanding their needs and ensuring your products deliver on the demand. Focus on customer life cycles that not only reach multiple years but also grow as time goes on by getting to know them.
The significance of customer life cycles bears out in advanced metrics, including the increasingly important lifetime value formula, which defines subscription-based industries. The rise of the software-as-a-service (SaaS) business model upended the existing B2C and B2B paradigms, with new software companies and 80% of existing vendors offering subscription services. Meanwhile, video games account for 39% of subscription revenue, making LTV more critical than other metrics.
To maximize customer LTV in today’s “everything as a service” economy, companies can’t just view their consumers as monoliths; each customer must be understood at the individual level, including their wants and needs, aspirations and frustrations. Understanding LTV is essential for organizations to thrive in our forever-wired world.
To develop a deeper, long-term relationship, continue to adapt CX strategies, processes and offerings. Subscription-based businesses cannot personalize experiences through sheer intuition or a vague profile of their median customer. Equipped with data-driven insights, companies can make more informed decisions about what consumers want and need.
In the video game market, new device technology is adopted quickly, so data that breaks down what gamers are using (game controllers, VR headsets) helps companies fine-tune support efforts to consistently meet players’ expectations.
For businesses that are hoping to grow, they need to invest in customer service and marketing technology solutions as a general rule so that subscribers are constantly invited to engage through a feedback loop that is monitored and measured. With the right CX strategy in place, brands can begin to collect and collate data from these interactions to further personalize the next engagement.
Build brand advocacy within your existing stakeholder community. Many companies recruit influencers to promote their offerings instead of focusing on their own customers and CX support associates, who are more believable and knowledgeable in validating their brand.
If you’re looking to expand your subscription-based business, invest in CX professionals who can resolve issues in real time and serve as brand ambassadors. This will create loyalists out of customers through each interaction and beyond. Shawn Stacy is Chief Client Officer at Alorica.
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Alorica Inc. (“Alorica”) is the holding company of various direct and indirect subsidiaries, including Systems & Services Technologies, Inc. (SST). Many of Alorica Inc.’s subsidiaries operate under the brand, Alorica,
but all remain separate legal entities.