About
Fender is an iconic maker of stringed instruments, pedals, accessories, and amplifiers, manufacturing and selling legendary guitars since 1946.
Industry:
01
The Challenge
The company was experiencing incredibly high churn among new customers, with 90% of people quitting within the first 3 months of buying a guitar.
02
The Solution
On the foundation of Zuora’s subscription management platform, Fender developed a subscription service that teaches people how to play the guitar, and most importantly, enables Fender to develop an ongoing relationship with their subscribers.
03
The Benefits
With 200,000+ paying subscribers to Fender Play and a nearly 95% retention rate, Fender has mastered “stickiness” and created a steady, predictable new revenue stream, all while strengthening their brand.
“Zuora sits at the nexus between IT, finance, and digital, binding them together with shared data. Our product team uses that data to improve purchasing and payment flows, and to experiment with different pricing tiers independently—without having to worry about downstream dependencies.” ‒ Ethan Kaplan, Chief Digital Officer, Fender
Fender is the world’s largest manufacturer of bass guitars, guitars, and ukuleles. While the company has a track record of success going back to 1946, in 2015 they were facing a new challenge.
Internal research revealed that 90% of their customers quit playing the guitar within 3 months of starting. Conversely, they also found that players who stuck with the guitar for at least a year became musicians for life, going on to purchase multiple guitars, amplifiers, and accessories.
In addition to the incredibly high churn rate for their core product, Fender was unable to gain insights into what was causing the issue, or how to remedy the situation. Because their products were traditionally sold through retailers, they didn’t have visibility into who their customers were or how they behaved once they bought a guitar.
Fender realized they needed to get to know their customers and help them get to the one-year mark with their new instruments. How to do that? Launch a subscription service that taught newbies how to play the guitar.
Fender had their work cut out for them—when the project began, they didn’t have a digital strategy, or even an engineering team. Everything from operations to applications to design had to be built from the ground up. They needed a partner with experience in subscriptions and recurring payments. So they chose Zuora.
Zuora helped Fender launch Fender Play, an online subscription service that provides step-by-step lessons from expert instructors. The service, with monthly and annual subscription options, provides more than 3,000 individual lessons across multiple instruments, genres, and skill levels.
The Zuora platform supports all aspects of subscription life cycle management and the complexities of a subscription business. And, for self-service, Zuora’s ability to manage use cases of suspensions, payment method updates, and cancellations were all table stakes.
As Ethan Kaplan, GM, Fender Digital at Fender, noted, “It seems simple to bill somebody on a regular basis, but then you have to think about proration and renewal rates and cancellations and dunning and a ton of stuff that was all new for the company. Zuora was our partner choice to help us make sense of it all.”
Within three years, Fender Play had 200,000+ paying customers with a nearly 95% retention rate. Fender Play subscribers also engage with the products more, spending 40% more on average than non-subscribers.
By providing services, Fender increased engagement with the end consumer, turning more beginners into lifelong players—and lifelong customers for the Fender brand. And with the guitar lesson market twice the size of the new guitar market, lessons-as-a-service (LaaS) opened up a new revenue stream, driving incremental, predictable revenue growth.
Even better, Fender Play has met a huge untapped need during the COVID-19 pandemic. With so many people sheltering at home, learning to play the guitar has proven to be a much-needed stress reliever. As a result, membership has soared to more than 1 million subscribers.
“Music makes the world turn even when things are disrupted,” says Kaplan. “So we continue to focus on that mission and keep moving forward with Zuora.”
