The COVID-19 pandemic has resulted in an upsurge in the time users spend online. It has also changed their spending patterns, posing some interesting opportunities and challenges for subscription businesses.
In this article, we will have a look at how subscription businesses can ensure growth amidst the on-going pandemic and beyond.
COVID-19 and subscription businesses
Back in the pre-COVID days, being a homebody, spending hours and hours at home, without going out was considered a rarity. And while people spent a considerably large amount of time on their phones, scrolling through social media, they also had other activities to take on.
Enter the pandemic era, and everyone was suddenly homebound. People were pushed inside their homes, and the times were uncertain, they still are. But the biggest relief that people saw in staying at home was the internet. People utilized their newfound time, saved from commuting to work, to binge-watching content on OTT platforms, consuming more media, or taking up online courses for instance. Consumers also recognized the safety and convenience in turning to online grocery delivery options.
The OTT platforms alone saw year-on-year growth of 135% in the US in the COVID-19 era. But it is important to note that not all subscription businesses have seen the same exponential growth.
Not all roses
- While a small percentage of subscription businesses have experienced fast growth, many have experienced slower growth and several others had no impact on their business.
- With remote working further reducing the chances of people going out, the subscription businesses that didn’t resonate with people’s needs at the moment took a hit.
- The second half of the year began, and the pandemic was still around. The global impact on jobs and economic crisis was and continues to be cumulatively impacted.
- And this is why the current environment for subscription businesses is more complex and challenging than expected.
- With people being more selective about where they spend their money, the initial gold rush seems to be over.
Here’s what SaaS companies can do to stay in the game and make most of the situation and stay afloat during and post the pandemic.
Make the value proposition clear
The value proposition for any business is critical, especially in times when the customers might not be in their best place – mentally or financially.
Purchasing a subscription means a long-term financial commitment that people might not be comfortable making at the moment. With plenty of options available, choosing a cheap option over the familiar one can be expected. Businesses need to understand that even their existing customers might be looking at the offerings differently and a rehaul in establishing the value proposition that would seem relevant in the current times.
Offer personalized pricing plans
One of the most significant collateral damages of the pandemic is the economic slowdown that is as real as it can get. Instead of sticking to the conventional pricing models, businesses can innovate and create more flexible and personalized pricing plans based on individual usage patterns. They can consider charging users based on their usage instead of an all-encompassing umbrella price. They can pay special attention to the unique needs of the customers and analyze other significant elements as a part of consumer analysis and offer the pricing plans that suit their specific needs without burning a hole in their pockets.
Incentivize long-term commitment
As finances take a toll, customers who still manage to opt for a subscription deserve to be valued, and this is a great way to retain them. Subscription businesses can get started by offering discounts on long-term commitments, adding an add-on or two as a complementary offering, or slipping in a free month to reward those that take up long-term subscriptions.
Entice with adjacent offerings
Just like B2C, B2B businesses have more reasons to get creative as well. For instance, with the entire workforce shifting to remote operations, changing dynamics of employee engagement, and need arising for corporate security, subscription businesses in the enterprise space can add value with innovative IoT-based offerings. These offerings can be directed to solve business-specific problems and help their enterprise customers with a well-oiled solution.
Focus on retention more than new customer acquisition
Customer retention is going to be a significant challenge with all the impending shifts brought in by the pandemic. Subscription businesses can focus on building a rapport with their customers, if they already don’t have one. They can allow their customers to temporarily pause services, give leeway in billing by extending the dates, or not auto-cancel subscriptions on non-payments. Aligning the marketing campaigns to stay in the eyeline of the customer without sounding ‘salesy’ can also help. This is a time to be compassionate, and a little will go a long way.
The times are tough, and there is no doubt about that. The last thing that you want to do is overwhelm your customers with complex pricing plans or billing cycles and processes. Knowing when to pivot and keeping it as simple as possible can help to sail through difficult times, both for the customers as well as the businesses.
During these unprecedented times, the churn rate of subscription businesses is causing a whirlwind of new challenges. By implementing such out-of-the-box strategies, subscription businesses can not only grow but also create a positive impact on the lives of their subscribers. To be responsive to shifting customer needs, it is imperative to have a subscription management solution that is robust and provide the tools to help your business pivot to offer more different pricing models, terms, promotional discounts and added offerings with speed.
Connect with us for a demo of OneBill, and we will show you how you can scale varying product, pricing models and incentive schemes for unique customer arrangement.