The power of personalization and subscriptions for revenue growth

In the early days of online shopping, it wasn’t uncommon to see websites suggesting that you buy a product after buying a similar one. But while you might like your new designer T-shirt enough to want to purchase a second one in a different color, it’s safe to say you wouldn’t need another refrigerator or annual wall calendar for some time to come. 

Personalization has come on leaps and bounds since the dawn of e-commerce. Consumers now expect convenience, a smooth digital experience, and the highest levels of personalization when deciding how to spend their money. They will always gravitate to where they find the best value for their time, money, and loyalty.

Finding the customer value sweet spot

The key thing to remember is that ‘customer value’ is not stagnant, and neither is customer loyalty. You need multiple touchpoints to enable continuous engagement to understand where customers find value in your brand. Today, subscriptions provide the best business model for businesses that want to stay in consumers’ value “sweet spot.”

Subscriptions provide an effective basis for your understanding of ‘value’ to evolve and, consequently, for customer loyalty to thrive. They offer repeated opportunities for you to learn about your customer’s needs, preferences, and behaviors, which, over time, will help you create strong bonds with them and deepen your presence in their daily lives.

When you offer your customers high-value benefits and personalized communications, you give them compelling reasons to remain loyal to you rather than switch to a competitor – even if that competitor offers a better price on a product or service. 

What’s in it for me?

According to McKinsey, companies that excel at personalization generate 40% more revenue than average players. In subscription terms, we have seen further benefits – for example, utilizing customer data to craft more relevant promotions can amplify offer usage by as much as eightfold.

When you consider that retaining an existing customer costs five times less than acquiring a new one, it becomes important to look at personalization at scale and see how you can make it the driving force of your customer retention strategy.

A well-optimized subscription program can pay dividends here.

Putting data to work

Of course, consumer preferences can change over time, so you need to keep an eye on behavioral and transactional data sets to execute successful personalization. These provide valuable insights into your customers’ purchase habits, including what they buy, how often they make purchases, and their preferred payment method.

Collating, analyzing, and managing this intelligence at scale demands expert technological capability and robust infrastructure. You’ll need both access to quality customer data and the ability to leverage it through effective offer delivery to retain customer loyalty.

Subscription management platforms like Chargebee Retention help you do this effortlessly with automated workflows designed to maximize retention rates. For example, you can automate payment recovery strategies to ensure they are optimized for particular customer segments and their response times. This way, you can easily retry failed payments that would otherwise lead to involuntary churn. Similarly, Chargebee’s proactive churn management suite can help you boost retention with cancellation alternatives for subscribers who are considering leaving – re-engaging them with the right offer at the right time.

Personalization may seem like magic to your customer, but for you, it’s merely the result of thousands of small data-driven decisions – some of them automated. Businesses that create robust foundations for this decision-making stand to win their customers’ long-term loyalty.

To learn more about how to bolster your loyalty programs and subscription retention strategies, read our latest e-book in partnership with Eagle Eye.