So you’ve launched your subscription app, and you have some subscribers. You’ve only scratched the surface. Now the real work begins. The key to subscription models is that the benefits keep improving to support the subscriber’s ongoing goal. And at the same time as you’re optimizing for your existing subscribers, you have to continue to stay relevant for tomorrow’s members.

Subscription models are complicated.

If you’re responsible for the product roadmap, how do you prioritize where to invest first, and what can wait till later? Here are 10 tips that might help you focus.

  1. Design for the whole party. Think of your product as a party. Then identify your greatest opportunity for improvement. There might be some people who don’t know the party is happening, or don’t realize that their favorite band is going to be there. That’s an awareness issue–can you build in a way to attract people who might not otherwise know about your product? There might be some people who pass by the party but don’t feel an urge to go inside and check it out–that might mean you lack a headline benefit that will attract them. But just because someone signs up, or enters the party, that doesn’t mean your work as a product manager is done. You need to make them feel welcome, and help them figure out where the fun activities are–the bar, the buffet, the band. This challenge is about surfacing features, and onboarding a new subscriber to create habits. Without good onboarding, you will have a leaky bucket. Even if you engage people and they find their way to the best parts of the party, they might grow tired of what’s familiar. If that’s your issue, you may want to expand the features for the most engaged subscribers, or even just create features to remind subscribers to re-engage. With subscriptions, it’s not enough to just attract new subscribers, it’s critical to engage them.
  2. Optimize for customer journey (not subscription journey). Many people confuse the subscription journey with the customer journey. The subscription journey is how the customer experiences the subscription elements. Where is their point of entry, and what do they do there? What brings them deeper into the product, and what communications and experiences do they have with your company and your product along the way? But the customer journey is bigger. To understand the customer journey, you need to take a step back and think about why the customer came to you in the first place. What was the bigger goal that drove them to you? For example, I buy a white blouse not because I want to own a white blouse, but because I want to look appropriate for speaking engagements. I don’t enjoy shopping and I don’t really care about details about how the blouse was made. The less time and effort I have to spend on my clothes to achieve my bigger goal, the better. If the blouse magically just appeared in my closet, that would be ideal. And frankly, if the blouse came with the rest of the perfect outfit for my upcoming speech, and cleaned and ironed itself, that would be better. By understanding the subscriber’s current journey and goal, you will identify many more ways to align your ongoing services around the subscriber’s ongoing goal–and justify recurring revenue.
  3. Understand where the blockage is. If your business isn’t growing as hoped, take a look at each part of your member journey. At the front end–do people even know you are having a party? Do they know how to get to the party and know that you have an awesome band, great food and really fun people? Or do they make it to the doorstep, only to turn away because they don’t feel welcome, or don’t like what they see when they peek inside the windows? If these are your challenges, you might want to invest in acquisition and onboarding. On the other hand, if the front hallway is full, but people aren’t finding their way to the food and music, you might need to invest in surfacing the best features, and helping new subscribers establish habits. Or maybe your problem is that people feel like there’s not enough to keep them at the party, so they’re leaving–in this case, you might need to add more features and content to keep them engaged for longer. Note that improving engagement will be more profitable than improving acquisition. Retention may not be sexy, but it is valuable!
  4. Invest in Onboarding. The moment of transaction is the starting line, not the finish line for the relationship. And it’s during those first seconds, minutes or days after someone signs up when they decide if they’re going to make your offering part of their regular habits. So it’s important that you optimize that experience. You want to do three things: give them immediate value, reinforce the wisdom of their decision, and help them optimize their experience for the future. To do the first, you want to ask yourself “why did they sign up at this moment? What did they hope to accomplish right now?” and make sure that they get that–whether it’s a piece of content they want to watch, or a task they need to complete–as quickly as possible and with a minimum of friction. Then, you want to show them the value they’re getting, by putting it in context of their goals, such as “you have access to over 4000 pieces of content” or “now you can transcribe any recording in minutes instead of days”. And then, you want to help them establish habits–what features do your most engaged and happy subscribers use, and how can you ensure that this new subscriber finds those features? Remember, enthusiasm has a half life and you need to be aggressive and strategic during this short-lasting phase.
  5. Product Market Fit (PMF) is about acquisition AND engagement AND retention. Many product management teams optimize around customer acquisition. Do the new headline benefits attract new customers? And having great acquisition stats is important, but it’s not the only thing. With a subscription model, it’s just as important if not more important that your users continue using the product. PMF needs to be ongoing, or you’re going to lose your subscribers as quickly as you sign them up. What do you do if a subscriber wants to cancel–is there an in-product way to win them back before they go? And even before you jump to rethink the “cancel sequence” in an effort to improve retention, take a look at how you track, manage and optimize for engagement. The key metrics here are recency, frequency, depth and breadth of usage. It is likely that your best (most valuable) subscribers use certain combinations of features and engage according to a specific cadence. Do you know what that engagement looks like (or should look like) over time?
  6. Remember that retention is a team sport. As a product manager, you have many levers to help subscribers adopt usage habits that will support retention. But you are not the only one who can influence that Key Performance Indicator (KPI). The marketing team can create campaigns for existing subscribers to highlight use cases and benefits, or reach out when a subscriber hasn’t logged in in awhile. They can also take a look at who they’re attracting and what promises they’re making–in some cases, the reason people are canceling is because they weren’t the right subscribers to start with. Customer Support (or Customer Success) can proactively reach out as well, or respond to inquiries. And your tech infrastructure team could play a role if your bandwidth or billing system isn’t optimized correctly. Passive churn is still churn, even if it’s out of the product manager’s control. Maybe now is a good time to bring together colleagues from across the organization to look at all of the drivers of churn, and determine what tactics each of you might be able to apply.
  7. Resist the temptation to keep adding new SKUs. Product managers are always looking for small, iterative experiments to improve metrics–and that’s a good tactic. But it’s also important to remember that just because a change moves the needle, it might not be good for everyone–you might have one segment that loves it and another that hates it. That’s why it’s useful to take a step back and look at your key customer segments and optimize for each group, one at a time. Otherwise the features you’re creating might be at odds with each other and you might be “almost but not quite” building a perfect offering for several different types of prospect. When in doubt, keep your offering simple, and focused on a single tier, unless you have a clear and compelling reason to add another tier for a different use case or customer type.
  8. Know which engagement benefits are early indicators of retention. Customer Lifetime Value (CLV) is a key metric for subscriptions because it takes into account the duration and expansion of the relationship as well as the initial transaction. But it can be hard to calculate, since you have to wait until the relationship ends. However, in many cases, you can tell how the relationship is going in the first few periods. Churn is nearly always highest from trial to paid and from first paid period to second paid period. Once you get through those early periods, it’s much easier to estimate the duration and value of that relationship based on other “lookalike” subscribers. Beyond retention in the first few months, early behaviors can be indicators of engagement. How many times did they call you during onboarding? How many types of content did they consume in the first period? Did they make the extra effort of connecting your app to other key products they use? Each of these behaviors increases the value of that relationship. Develop hypotheses about these early indicators and track them!
  9. Don’t put “clever” over forever. Sure, you can increase CLV by hiding the cancel button or by raising rates or sneaking in an additional “one time” fee that your loyal subscribers might not notice. In the short term, these kinds of tactics can give you the bump you need to hit your quarterly goals. But longer term, you’ll pay for this kind of clever trick, in the form of Word of Mouth and reluctance for former subscribers to return and give you another try. When you’re in the world of subscriptions, you’re relying on trusted relationships, and if you take advantage of that trust, you’re killing the golden goose.
  10. It’s not about the product. Product managers rightly take great pride in their creation. This is not just about tech products. It could be the journalists at news organizations, or the surgeons at hospitals. But the product itself rarely fully solves the subscriber’s ongoing need. We read the paper to understand the world around us, and see surgeons to maximize our healthy minutes…but newspapers and surgeries are imperfect and incomplete tools along the way toward achieving those goals. No matter how good your product is, it’s important to keep your focus on the customer’s ongoing needs and be willing to continue to evolve how you help them. Netflix has always provided a great catalog of professionally created content, delivered with cost certainty in the most efficient way possible, but 15 years ago, it was 3 DVDs out-at-a-time and the content on those DVDs belonged to someone else. Today it’s streaming content, and the content is exclusive to Netflix. The company has been willing to rapidly evolve the offering in order to stay relevant to subscribers. In contrast, many news organizations have been reluctant to move their content to digital and to think of the digital elements of the offering as part of the value proposition and not just as support for the articles themselves. As much as we love our products, it’s critical to let the customer take the lead.

The product manager is probably the most important and strategic hire of any subscription business–they are the person who puts together all the parts of the subscriber experience and creates something that delivers on the organization’s “forever promise”. However, it’s critical to remember that the initial offering is just a starting point, and that the minimum viable product (MVP) is just the minimum. It’s how the organization continues to evolve that offering over time to stay true to that promise and deliver increasing value against that promise that guarantees you a long and mutually beneficial relationship with each subscriber.