Increase Customer Loyalty and Retention with Subscription Bundles

Increase Customer Loyalty and Retention with Subscription Bundles

From news to vacation stays, even to enhanced car features, consumers worldwide can now access subscriptions for just about anything. This use-based subscription economy is proving advantageous and efficient for both customers and companies who can tailor their respective purchases and costs to the actual value exchange – what marketing expert Öykü Ilgar calls a “shift towards experiential consumerism.” With this shift has also come the risk of subscription oversaturation, so now more than ever, companies need clear ways to differentiate their value and unique consumer experiences. 

Subscription bundling is rapidly becoming one of the most powerful ways to do it. In fact, most of the industry is shifting towards this model, and in some sectors like streaming services, over 80% of leaders point to ‘super bundling’ as the profitable future. This allows curated, flexible, and customized consumer experiences that increase value for everyone. NewscastStudio describes super bundling as “a strategy that consolidates multiple services into a single offering” – meaning far more than one or two options in a bundle and leveraging cross-industry partnerships; they cite the overwhelming benefits for companies as new customer acquisition and reducing churn. 

For bundling models to be effective, subscription businesses need to know their audiences deeply, understand their wants and needs from the product or service, and provide the experience customers are seeking. These are some bundling best practices foundational for both strengthening and extending customer lifetime value.

 

1. Expand Tiered Pricing Options

Traditional flat-rate or fixed pricing simply cannot meet all the needs of complex audiences anymore. At its core, bundling is a way to broaden the options available to diverse subscribers, allowing them to access a branded package that’s mixed and matched to their unique needs. Tiered pricing lets customers select for their desired functions, budget, use patterns, and features; it can be expanded to accommodate more types of customers as well as various preferences as existing audiences change over time. This cultivates customer satisfaction and loyalty. 

Tiered pricing comes in many formats for various needs like productivity or functionality; tiered pricing can work well for B2C subscribers, as well as B2B subscribers as in this instance from Microsoft.

It’s important to know that tiered pricing is competitive in the acquisition process, but it also bolsters subscriber retention since its flexibility throughout the customer lifecycle means subscribers can choose something that better suits them instead of churning. Tiered pricing strategies create options and fill gaps at the moment of purchase and over time.  

 

2. Experiment with Metered Packages 

Metered bundling – also called pay-as-you go or usage-based pricing – allows customers to only pay for what they actually use. This is compelling to consumers in both physical and digital subscription contexts, such as using vehicles or engaging pieces of online content. This model establishes a strong link between value and cost, which can be particularly compelling to cost-conscious audiences. Simon-Kucher’s guide for consumption pricing models explains the benefit as “[limiting] sales friction and [allowing] a customer to experience value without fretting much about the cost.” 

This model is highly adaptable and attractive to many audience types. It can also be leveraged as a reactivation tactic for subscribers who are tentative users, have lapsed, or are at risk of lapsing.

 

3. Batch Test before Scaling Bundles

Small batch testing is a useful way to trial run new pricing models, messaging about bundles, or packaging options for audience segments before scaling them up. Split testing, for instance, can help refine value proposition messaging on a landing page when rolling out new subscription bundle options to existing audiences or when targeting new subscribers. 

It can be useful to test new pricing options with small portions of audience segments that are similar in demographic or psychographic makeup, allowing companies to model and learn more about market fit. Small batch testing in context of both acquisition and retention strategies can provide meaningful performance projections before being offered to larger audience sets.

 

4. Utilize Customer Feedback for Better Understanding

As reported by Digiday, “Consumers don’t want fewer subscriptions — they actually want more options, more categories and more variety without more hassle.” But what kinds of options, categories, and variety depends on the audience. The value of the customer experience is highly subjective, so one of the best ways to learn about audiences is to ask! 

Looking for customer feedback in creative ways like influencer dialogues or traditional ways like surveys can be great tactics to obtain customer insights. Companies that remain proactive about customer feedback – then stay responsive in their consumer experience development – will create compelling packages that uniquely meet the expectations of their subscribers. These companies grow their brand authority and boost loyalty for long-term retention. 

 

5. Roll Out Relevant Bundles 

Differentiating cost and content relevance for different audience segments is another important facet of bundling. For example, the Wall Street Journal has long offered student subscription bundles, and this success has depended significantly on the ability of their team to market and tailor bundle offers in ways that students will find and engage with – and that ultimately meet evolving student needs. A retiree or someone no longer in an academic environment would not find the price point of the bundles or even the subject matter for topic-based bundles as pertinent. This is why it’s important for subscription businesses to be able to clearly identify audience segments, demographics, and needs – and then only display offers that clearly match. One key for this type of roll out is to understand where a bundle fits into the subscriber’s overall lifestyle and ensure the package resonates.

 

6. Cultivate Key Partnerships 

Lastly, strategic collaboration is a powerful way to build subscription bundles. This can occur within the same industry – such as multiple digital news and media brands that work in different subject matter cooperating to offer bundles of diverse content; or strategic partnerships can be built across separate industries. Complementary content or products in a subscription can enhance bundle value and even open up new audience markets. 

Scrap Standalone Subscriptions for Better Service….and Competitive Returns!

Today, static and standalone subscriptions are simply too narrow for contemporary audiences, but subscription bundling offers an effective, adaptable strategy for cultivating the full subscriber pipeline from acquisition to retention to renewal. This proves especially true in the hyper-personalized digital age. Subscription bundling is no longer just about being the cheapest option for subscribers, but instead, being the most customized to their pricing needs and other value preferences. 

In most instances, customers are wanting to access more if subscription bundles meet their needs, whether through tiered or pay-as-you go pricing or partnered packages. Ultimately, subscription bundling can deepen the connection with audiences, reduce churn, cultivate brand differentiation, and expand competitive revenue streams.

 

 

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