Unlocking customer lifetime value is a critical success factor for B2B subscription businesses. And, it is getting harder. Demand for subscription services is rocketing, with the ‘anything as a service’ market set to reach $344.3 billion by 2024. This means B2B customers are experiencing new varieties of solutions all the time, and their expectations are constantly changing. Changing expectations represent both risk and opportunity.
Creating a high performance service for customers has never been more important and was the focus of the first SubsLab, run by Substribe. SubsLab is a series of highly focused interventions for B2B subscription leaders, helping members think differently and apply insights to their business.
SubsLab #1 featured three subscription leaders with experience at Salesforce, Relx and The Economist, and a panel of members from Vixio, Infopro Digital and Media Business Insight. The session is available on demand, but here are five tips to help you move the needle on your B2B subscription service:
1. Use experimental approaches
Having a balanced perspective and experimental mindset avoids the enemies of a successful launch – analysis paralysis, inside out perspectives, and group think.
Launches create huge potential to capture and keep customers, and this is why most companies invest lots of time and energy in them. However, the majority of launches fail. Of those that do make it, they often provide only a short-term spike in results.
It’s important to take an outside-in approach, discovering what your customers value most and are willing to pay for and why. Starting with your most strategic customers, adjust the positioning and pricing early. Don’t get tied down to tech. Move forward with the leanest technology stack you can.
2. Make data work hard
There is a difference between collecting data and putting it to use.
Customer data should be one of the greatest assets for a subscription business because the customers create patterns over time. Use these patterns to model your customer journey. Create personalised experiences that are geared to your key customer segments. Build your knowledge of customers so that they feel you truly understand them.
On the flip side, investigating product and customer fails informs both product strategy and also retention and win-backs. A better product strategy helps keep and attract the right customers. Win-backs reconnect with lost customers at far less cost than acquiring new ones.
3. Iterate on your customer insights
The point of listening to customers is to make improvements in performance.
Insights need to be gathered continually and purposefully. There are opportunities to listen to customers along the journey, but it is easy to see micro-issues like queries, bugs, or billing problems as things to resolve and move on. However, it is pivotal to think of these moments as touchpoints to understand the customer experience.
Even the customers who are not responsive are telling you something. They may be the busiest – could they be the segment most in need of your help? They may be the least satisfied – could they be most at risk of churning?
Use all touchpoints with customers to understand how they want to interact with your product and your business.
4. Communicate consistently across your company
The name of the game is to build up trust at every interaction.
Having consistent communication in any interaction with customers is critical. This includes conversations, handovers between departments, social media, marketing, and back office departments such as invoicing and accounts payable.
Everyone in the company needs to adopt a customer first mindset to create empathy with the customer.
5. Think retention first, acquisition next
The nature of subscription businesses means there is certainty in knowing how much money is left – after churn – to invest in sales and marketing.
However, taking an acquisition first strategy often really means ‘acquire first, ask questions later.’ And this is a sure-fire way to slow growth. A successful retention strategy should drive activity and engagement and referrals, not just sign-ups.
Improving retention, and acting on the intelligence created from measuring it, leads to multiple growth opportunities. For example, creating an informed profile of your ideal customer to acquire more of those customers. Or leveraging referrals from satisfied customers helps with acquisitions. But it needs a priority focus on keeping the customers you have, to grow your future subscriber base.
Are you leading a B2B subscription and want to know more about how to create customer lifetime value post-COVID? Tune into the full SubsLab session for all the golden nuggets, featuring David Warren, Shannon Hamer and Iain Noakes – contact Substribe today.