We are excited to report back from the Subscribed 2016 conference held on the 15th November at Tobacco Dock Exhibition Centre, in London.
The free event was hosted by Zuora the industry leading subscription management software, who invited companies & entrepreneurs across all industries to discover why they believe the subscription model is the most disruptive business model of all time.
Although the event was geared to ultimately showcase Zuora , the collection of talks from the industry provided a wealth of inside knowledge on how the UK market is embracing subscriptions and the opportunities on offer for startups entering the industry.
We have picked out some of the key points which will offer value to anyone looking to launch or build a subscription based business.
What we learnt at a glance :
- The subscription economy is continuing to rise at a rapid rate.
- The subscription business model is one of the most disruptive business models of all time.
- Customers want more experiences, convenience and value.
- Subscriptions are quite simply the future into how customers will access products and services.
- There are huge opportunities for startups to use the subscription model to disrupt industries and launch new dynamic services.
Subscription Economy continues to rise in UK
As part of the run up to Subscribed 2016, Zuora combined their own data in a collaboration with YouGov to produce a report titles "A Nation Subscribed" that reveals how rapidly the subscription economy is growing in the UK, including:
- 4 out of 5 Brits now subscribing to products an services.
- 12% of of Brits disposable income spent on subscription services.
- 2 in 5 of the UK population say they are use more subscription services then they did 5 years ago.
- Over a quarter think they will be using even more services in 5 years time.
The report reveals the reasons why customers preferences have shifted towards paying a regular fee for curated access to goods and services :
- Subscriptions give access to new things instantly.
- Allows customers to discover items and services based on their tastes and preferences.
- Subscriptions make life more convenient.
- Provides better flexibility and freedom.
- Better value and more positive customer experiences.
Subscriptions are the future
The evidence is clear, subscriptions are simply the future. For fairly low setup cost, startups can launch niche new services to a small yet loyal subscriber base and then see rapid growth through word-of-mouth referrals.
For customers it provides a better overall experience, freedom and flexibility and startups benefit from the recurring monthly revenue to scale effectively.
Like any business there are still challenges to overcome, for a subscription business the focus is on keeping subscribers instead of how many products can we sell.
Judging by the report and the questions in the room, startups still face a number of challenges in this area when building a subscription based business.
Top Customers Concerns to Overcome
From the survey, customers main concerns about signing up to a subscription include :
- Concerned about difficulties unsubscribing.
- Concerns over monthly fee increasing.
- Don’t like being limited to a certain range of products. Prefer tailored offerings.
- Concerned over lack of transparency.
- Worried about loosing track of subscriptions signed up to.
- Loosing interest in the subscription
Top Questions from Subscription Startups:
The discussions around customer concerns raises a number of questions for startups including :
- How do we engage with our subscribers?
- What is churn?
- How can we reduce churn?
- How can we grow our subscriber base?
- Whats the best pricing structure?
- How can we use data to grow?
- What experiments should we perform to test?
- How can we switch our traditional business to a subscription model?
- How do we manage taking monthly payments seamlessly?
Zuora for Large Enterprises Only
After the speaker sessions, the Zuora sales team hit the stage to showcase how these questions could be easily answered through their new range of subscription management and analytical tools.
In essence the software helps provide a dashboard to easily create and manage subscription packages, manage monthly payments, view analytical data and subscriber insights plus provide guidance from their team of subscription experts.
Although impressive, Zuora is currently only available for larger enterprises with over a £1 million in yearly revenue. You won’t find any pricing page on their website, with reported starting costs in excess of £40k.
What about the Startups?
This presents a clear challenge for smaller companies and startups looking for guidance, tools and resources into how to effectively grow a subscription business. At present startups are learning from trial and error in this emerging new era. Some are failing to connect to subscribers while others are seeing rapid growth.
Support for Startups from Subscription Radar
To help we intend to double our efforts in developing our resources area to include the following :
- Success stories and case studies from the UK subscription startup scene.
- The secret weapons, tips and tools the top startups are using to grow subscribers.
- A new forum area to discuss, share and comment.
- Support and guidance.
- Promotion and exposure with our reviews and article features.
- More focus on the logistics of shipping physical products via Subscription Boxes not just Software as a Service (SAAS)
Top Tips from Subscribed 2016
In the meantime , check out the top tips we picked out from Subscribed 2016:
- Nurture and develop deeper customer relationships with your subscribers.
- Connect with your existing subscriber base as a priority, many services focus too much on new customer acquisition, resulting in subscribers dropping off after 2-3 months.
- Think about the whole customer experience instead of just shipping product.
- Keep providing value and communicate this value to your subscribers.
- Segment your subscribers based on habits and preferences to offer tailored marketing promotions.
- Solve an existing frustration with your market to attract customers.
- Perfect the customer signup process - Hassle free with easy signup, easy payment, no barriers.
- Keep experimenting with pricing, options and add-ons.
- Keep a balance of communication with subscribers to learn what they actually want without bombarding them.
- Allow your service to be tailored to suit your subscribers preferences.This will allow you to provide a better service whilst finding out which options your subscribers prefer.
- Monitor social media conversations that discuss your brand.
- Keep evolving to keep subscribers interest.
- Use and act on your data.
Key data metrics to monitor and evaluate growth
- Magic Number = Monthly Recurring Revenue - Monthly Cost
- Churn Rate = The monthly percent of customers unsubscribing
- New Subscriber Rate
- Amount of Up-sells - Customers upgrading to a higher value package
- Amount of down grades
- Conversions from website visitors - Broken down from source ie social, reviews, direct, promoted campaigns.
We hope you've found some value in our summary from the Subscribed 2016 event.
If your interested in getting involved and being part of our community then we would love to hear from you.
We are keen to speak with more startups to hear your stories about the challenges you faced and the strategies you used to overcome them. Your tips and guidance will be of great value plus being a featured guest will provide a deeper level of exposure for you and your brand.
To get started please take 2 mins to take our short Sub Box Owners Survey, which aims to find out more about your business and your journey so far.
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