Subscription Marketing: Success Strategies for World Class Results

Subscriptions are projected to become a mind blowing $1.5 trillion market by 2025. From mobile apps to John Deere tractors, the future looks like it will be subscription-based. Subscription marketing is a frontier opportunity for marketers wanting to succeed with subscription products or services.

In this article, we will explore the five critical strategies that can equip you to become a world-class subscription marketer:

1. Enhancing your CRM for subscriptions
2. Adapting marketing automation to the subscription lifecycle
3. Paywalls as your best low-hanging optimization opportunity
4. Viral loops to help subscriber acquisition and subscribe retention
5. Churn is a lagging indicator so you also need a leading indicator

Let’s dig into each of this.

Enhancing your CRM for Subscription Marketing

The relationship you have with your customers (and potential customers) requires special consideration in the subscription era. For subscription products, the customer journey needs to be modeled around a customer’s interaction with and through the subscription lifecycle over time.

Actionable Subscriber Segments

At a high level, a subscription-based offering has four high level customer segments:

• Never Subscribed: Prospects for trialing your subscription for the first time
• Currently Trialing: Customers who may convert into paying subscribers
• Active Paying Subscriber: Customers you need to work hard to retain
• Former Subscribers: Former paying customers you can win back

Within each of these segments there are also sub-segments your subscription marketing efforts need to take into account. For instance, within Active Paid Subscribers there sub-segments. Each need to be marketed to very differently. Here are some examples:

• Auto-renewing: Subscription is active, customer currently will renew at the end of the current billing period
• Not auto-renewing: Subscription is active, but customer is not renewing at end of the current bill period
• In grace period: Subscription is only still active due to a billing grace period. If the customer doesn’t current a billing issue they may involuntarily churn
• Cancelled: Subscription is active, but customer has cancelled effective at the end of the current billing period

It’s also important to recognize that subscription segments are fluid. Customers can and will come and go from segments and sub-segments as their relationship with a subscription changes.

Adding Subscriber Context

Your CRM system needs to be enriched with subscription context so you know a customer’s status within the subscriber journey at the current moment in time. You also need to know what their historical subscription journey is.

For instance, a customer may have been an Active Paid Subscriber for a dozen billing periods but is not currently paying. This customer is likely a high-potential win back opportunity versus a customer who was churned out quickly after one billing period.

To summarize, your CRM needs to be enriched for subscriptions in three key ways:

1. Current subscription lifecycle status
2. History of interactions through the subscription lifecycle
3. Customer lifetime value (CLV)

Armed with this you can effectively execute a subscription marketing automation strategy built for the subscriber lifecycle.

Subscription Marketing Automation

Marketing automation is a key strategy for lead nurturing in B2B sales since the sales cycles are long. It’s also becoming more common in B2C marketing as brands go beyond simple e-commerce use cases to a more holistic view of customer interactions across channels.

Marketing automation is perfect for subscription-based products and services. Similar to lead scoring, subscription marketers can use the CRM enrichment combined with interaction data to score customers.

Subscription Lifecycle Scoring

For subscriptions, a few different scores are needed. However, which is useful for a given customer depends on their current subscription lifecycle status. For example:

• A likelihood to start a trial score if the customer has never subscribed
• A likelihood to convert to paid score if the subscriber if currently trialing
• A likelihood to renew score if customer is an active paying subscriber

These scores, along with a customer’s current subscriber lifecycle status and CLV can be used for marketing automation campaigns.

For example, if a customer has never subscribed and their likelihood to start a trial score is low, then consider a marketing automation series focused on educating the user about what they are missing out on. This isn’t the moment for the hard sell. These users need to be nudged.

Similarly, if a customer is currently trialing but their likelihood to convert to paid score is low, then make sure they know how to get the most of their trial. They may not be aware of all the features and benefits they currently have access to.

Remember, subscriptions are a long game. Customers may come and go. However, you always have a chance to bring them back into the fold.

Too many brands focus on jamming users through the acquisition funnel and into a trial start before the customer even truly know what the offering is about or whether they even want it.

This is especially true in with mobile apps due to the reliance on paid acquisition, high D1 and D7 churn rates, and the post-IDFA privacy landscape.

Subscription marketing automation can help you leverage your customer data to target the right message to the right user in the right subscriber journey state.

Paywall Optimization is your best low-hanging fruit

So much effort is spent on acquisition campaigns to fill the funnel, at rightly so. However, it can be incredibly difficult to optimize your paid acquisition efforts.

This is partially due to the incredibly complex advertising technology landscape. It’s also because of the changing regulatory environment around end user privacy.

Many subscription products view the paywall as piece of transaction technology wrapped in a utilitarian user interface. A necessary screen that helps customers transact.

The paywall can be so much more. In fact, the paywall should be your most important subscription marketing asset.

The Right Paywall Infrastructure

Believe it or not, the paywall is one of the least optimized elements in many subscription businesses. This is because it’s often owned by the technical teams. Changes are infrequent and require a development cycle. Improved are requested by, but not managed by marketing.

It turns out with the right infrastructure, paywall optimization is one of the best low-hanging fruit opportunities. Conversion rate improvements of 2-5X are achievable through modest changes.

In order to optimize your paywall though, you need the right paywall infrastructure. The right solution should be able to meet the following requirements:

1. Create, deploy, and update paywalls using a paywall CMS
2. Show the right paywall to the right user with paywall segmentation
3. Run paywall A/B tests to improve conversion

In addition to the paywall, there is another experience you can deliver that will help drive down customer acquisition costs (CAC) and improve Retention. Let’s take a look.

Viral loops can help subscriber acquisition and subscribe retention

Customer acquisition is hard. In subscription businesses it can be even harder. While subscriptions can offer customers the benefit of a low monthly price for a product or service, you’re asking customers to have an ongoing relationship with you.

As we’ve discussed, optimizing paid acquisition is one of the most challenges aspects for subscription marketers. Viral loops can be a game changer that help your acquisition and retention efforts.

Here are some examples of some subscription product viral loops:

• A Currently Trialing customer gets time added to their trial by referring a friend who signs up. The trialing customer will likely become stickier, and you just acquired a new prospective customer at a much lower CAC.
• A news app Active Paying Subscriber can share a paywalled article with a friend. The paying subscriber feels good about sharing, and could even earn additional shares or maybe branded merchandise. Meanwhile, a new prospective customer gets a taste of what life is like as a subscriber.
• A Freemium User (e.g. prospective customer) gets a certain quantity or time premium access if they get a friend to sign up. Dropbox famously executed this strategy giving both sides of the referrals 500MB of free storage.

A successful viral loop, like a dual-sided referral program can be an excellent way to create loyalty-building moments with potential customers and subscribers.

Meanwhile, the quality of audience acquired is higher and the CAC economics to support the program are completely within your control.

Churn is a lagging indicator so you also need leading indicators

Subscription marketing requires great measurement. Yes, you need to track core business metrics such as MRR and Churn. These metrics are important.

Just remember, these metrics are lagging. You don’t have MRR growth until more trialing customers convert from free-to-paid and/or you have less churn in your paying subscriber list.

To know where your subscription business is heading, you also need leading indicators. Here are just a few examples of metrics you can measure over time to help you understand where things are headed now:

• The free-to-paid conversion rate. Is it improving?
• How % of users have auto-renew turned off? Is this trending up?
• What is the mix of monthly vs. annual plans? Is the trend changing?
• Are customer satisfaction surveys or app store reviews trending a different direction?

These are just come of the clues you can track to detect that change may be coming to your core subscription business metrics.

Subscription Marketing & Nami

Subscription marketing is a new specialization for marketers looking to drive marketing breakthroughs in the massive and growing subscription economy. With subscriptions on track to be a trillion dollar market in the next few years, it’s a great time to hone new strategies.

If you’re a mobile app publisher, Nami provides the premier solution for marketing your in-app subscriptions. We’re focused on delivering powerful tools to help you improve your app’s subscription marketing. Here’s just a few ways we help:

• Our platform gives you the subscription data layer you need to enrich your CRM and other important marketing systems.
• We also give you the right infrastructure to turn your paywalls into your most essential subscription marketing asset. This is made possible by a no-code paywall CMS and paywall A/B testing suite.
• We’re providing innovative capabilities to help you align your advertising and subscription monetization efforts
• Plus, we’re advancing your growth opportunities through subscription viral loops

If you’re interested in learning more, reach out and we’d be happy to show you a demo.