Subscription-based businesses (sometimes called "premium services") generally have opt-out relationships with their customers–that is, a subscriber remains your customer and continues making regular, time-based payments until the customer decides to sever the relationship by terminating the subscription.
As a result, product marketing teams at companies are in a quandry regarding how much money and effort to spend on product enhancements, designed to enhance loyalty, rather than acquistion. Loyalty with pay-per-use or pay-as-you-go businesses is based on staying connected after the purchase. For example, once I bought the first pair of pants for my husband with Bonobos, I was inundated with regular reminders to check out special offers from Bonobos. And, the Bonobos product folks are continuing to develop new products designed to keep existing customers happy.
But companies that sell me a service, whether content, SaaS or entertainment, don't always have an obvious metric to use that guides them about when to add new functionality to existing products. It's challenging to correlate churn with the absence of a particular feature that may have been requested, or offered by a competitor.
Another funny by-product of the opt-out nature of customer relationships is communication frequency. While most product marketing teams try to communicate with their customers as frequently as possible, with news about new products, services and promotions, as well as requests for product feedback, premium services companies generally limit marketing-related communication with paying customers, because any new contact might prompt the customer to rethink the agreement. For example, if a customer has a subscription to an online news source for $5 per month, she probably based her purchase decision on an assumption that she'd be reading that news with a certain (optimistic) level of frequency. She may not think critically about the value of that subscription again once she decides to sign up–until she is prompted by a change in her service, or an offer of something new.
So, what's a product marketer to do? I have a few suggestions:
- Know the value proposition you provide–thinking broadly, and consider the impact of disruptive technology advances, industry shakeups or other macro forces. If something big is changing, there are probably implications for your customer relationship
- Stay abreast of the competition–if someone else is offering the same value in a better way, think about whether it's something that needs to be matched or exceeded
- Look for behavioral clues about potential dissatisfaction, even if customers aren't talking about it. For example, if customers are using certain features in an unexpected way, or if they aren't using features they used to use heavily–try to understand what is driving the behavior chang
IMVU is always looking for new features to delight and surprise their members. Netflix introduced streaming video at no charge to consumers. Newspapers kept their heads in the sand and refused to drastically rethink their model, despite changes in both the availability of quality journalism and access to cheap, widely-available distribution, and now they're paying the price.
The best subscription businesses are constantly reinventing themselves, surprising and delighting their customers before they lose them, and strengthening the customer's trust that the company will continue to provide the best value available.
