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3 Loyalty Retention Strategies for Your Subscription Service

Retaining loyal customers is pivotal to the success of any subscription-based service, as it’s important to keep customers subscribed and engaged with the service. While many businesses focus on acquiring new customers, it’s equally important to focus on retaining existing customers and increasing customer loyalty.

Subscription services provide customers the convenience of having products and services delivered to them regularly. In 2023, Subscription Cancellations are at an all-time high in the USA markets. With such a market sentiment, brands need to have a loyalty retention strategy in place. We have enlisted 3 Loyalty Retention Strategies for Your Subscription Service that can help you win your customers.

What is a Subscription Based Service Model?

A subscription-based service is a business model where customers pay a recurring fee to access a service or product. Subscriptions can be offered on monthly, yearly, or pay-as-you-go models. Subscription services can be offered as a one-time purchase or as an ongoing commitment. For example, YouTube Premium offers an ads-free experience on subscribing as a Premium user at their monthly or annual subscription rates. 

Why is Retaining Customers Important?

Keeping customers happy and engaged helps to maintain loyalty and increase the lifetime value of a customer. HubSpot Research found that, in cases of company error, 96% of survey respondents continue buying from a company they regularly purchased from if the company apologized and corrected the situation. Retaining customers helps to reduce the cost of acquiring new customers, as well as increasing revenue.

Apart from the recurring revenue that existing customers bring in, there are upsell and cross-sell benefits. As per a blog by Chargebee, the success rate of selling to current customers is 60-70%, while selling to a first-time customer is 5-20%.

Thus, in a market where customers are fairly risk-averse and want to minimize their spending, retaining existing customers is critical to the success of a service provider.

Types of Loyalty Retention Strategies

  • Rewards Programs

Rewards programs help companies retain customers by incentivizing them to continue using their services. According to Forbes Research, 79% of consumers say loyalty programs make them continue to engage with a brand. While 75% say that they are likely to make another purchase after receiving an incentive.

By taking a subscription, a customer takes up a premium loyalty program with the brand or company. If they receive reward points as a part of it, the same can be redeemed for future purchases.

Prominent brands such as Sephora, Amazon Prime & Starbucks leverage such programs to cultivate a loyal customer base.

For example, Mariott offers it loyalty program called Mariott Bonvoy Benefits which offers multiple benefits from the moment users sign up. Through its portal, users have a personalized journey designed to heighten their experience with Mariott, as well as avail the best of travel and hospitality offers.

  • Personalized Customer Experiences

According to Evergage, 99% of marketers say personalization helps advance customer relationships, with 78% claiming it has a “strong” or “extremely strong” impact. Personalization helps make a customer feel more valued, and at the same time, it enhances their productivity or experience by helping them cut across a vast superset of choices, narrowing it down to highlight relevant material or services.

Streaming giant Netflix provides its users with hyper-personalized content recommendations through a customized Home Page, a Shuffle feature, and Recommendation lists. This helps users to be more engaged with the content they watch, as they are provided options based on their watch history and persona.

As more users become cognizant of extended reality technologies, the usage of AR/VR to draw in more personalized customer experiences has also increased.

Mantra Labs helped a leading Luxury Home Decor brand design and develop their Augmented Reality experience to boost their in-app engagement.

  • Automated Retention Strategies

Digital technologies enable brands to stay closer to their users and provide contextual nudges which ensure that there is a high recall for the product or service provided.

As most brands will have relevant subscriber data, they can use this to share personalized emails, push notifications, and other automated messages that are tailored to the customer’s interests and preferences. These messages can be used to remind customers of upcoming subscription renewals, offer discounts or promotions, or provide helpful tips and advice.

Brands must also ensure that the renewal journey of their customers is seamless. Providing multiple payment options, and, options to save payment details for faster checkouts.

While auto-renewals are a convenient feature, brands should proactively notify users of pending renewals, and in case of a heavily underutilized subscription offer customized plans. Media giant Wall Street Journal makes it difficult for paid users to cancel their subscriptions, with a user having to call their Customer Care Center and manually record their request to cancel the subscription, as opposed to directly canceling it via a portal. While this might marginally reduce customer churn, customer satisfaction drops significantly.

Eventually, brands have to ensure there is a balance between revenue generation and customer experience for prolonged success.

Final Thoughts

Retaining customers is essential to the success of any business. And loyalty retention strategies can help to ensure customers remain engaged and continue to purchase products or services. As subscriptions cancellation hit an all-time high, brands need to make their offerings personalized to provide value for money to subscribers. As well as ensure there is a significant focus on creating a seamless customer journey to boost customer satisfaction across all segments.


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