16 Aug Subscriber Acquisition: It’s Art and Science
Customer acquisition is complex in today’s hyper-competitive global marketplace. As a company, you have myriad questions to answer about your customers. What do they want? What do they need? How can they see you as a solution to their problems? How can you help them to grow?
Subscriber acquisition is even more complex than fixed-sale customer acquisition. With a subscriber, you are aiming to build a long-term relationship. You need to understand your customer’s ongoing needs. You need to understand their goals and their growth strategies. You may need to help them with mindset shifts to adapt to the ever-changing world of business. Since the sales cycle may be longer, it’s more important that you master the art and science of subscription sales. Since you are building long-term relationships, customer satisfaction is more important in subscription sales than in fixed sales.
When you start building your subscriber acquisition platform, you will be “data poor.” You will lack specific data to personalize your products and services to your customers. You will have to predict what your customers want based on industry trends or what your competitors are doing. In other words, whatever strategy you adopt, you will be neither artful nor scientific. That’s the bad news. But, keep reading. There’s lots of good news here.
Subscriber Art: The Good News
Like anything in business or life, there is good news and bad news. If you have not embraced big data, the bad news is that you have missed opportunities to grow your business. The good news is that we at BluSynergy can help you master big data and subscriber acquisition.
Big data is science, but it starts with art. The point of big data is to better understand your customers so that you can sell to them more effectively. And, once you’ve closed a new client and built a relationship of trust, you can upsell, cross-sell, and bundle your products and services. You can create recurring revenue, with or without a subscription model.
So, what is the art of big data? It starts with having a vision for where your company can go and a strategy for how it can grow. It encompasses engaging your entire leadership team, and eventually your entire workforce, in working together to achieve the big vision. You use art in creating buy-in among your leadership team and engaging your workforce. You draw on artfulness in how you tell your story, how you build your brand, what kinds of content you create, and how you message using compelling visuals. That will begin to attract the subscribers you want to sell to.
Once you have gotten a prospective or new customer in the door, the art of big data is knowing the right questions to ask. It’s not just understanding what your customers want, it’s understanding what they really need. Often people are terrible at knowing what they need, they just know they have a problem that needs fixing. What is your customer’s business model? Who are their ideal clients? Do they have adequate technology to support their goals? Does their workforce have adequate training? Are their problems short-term or long-term? How do they need products and services delivered? These are all artful questions you can address with your customers.
And, that leads to the science of subscribers and leveraging big data.
Subscriber Science: The Better News
You started with the art of subscriber acquisition. You spent time figuring out the kinds of metrics you need to grow your revenue and build market share. As you begin to attract subscribers, you build the data to master the science of subscriber acquisition.
The science of subscriber acquisition is all about big data. It’s understanding in quantitative terms your customer’s journey from prospect to subscriber to brand loyal customer. What are their conversion triggers? Which messaging resonates with which customers? Where are your marketing dollars effective and ineffective? Which subscriptions are most popular and with whom? That’s big data!
Once you understand your new customers and have built trust, you can work on upselling, cross-selling, and bundling products and/or services to your brand loyal customers. This is the beauty of subscription businesses: you collect a lot of data from your prospects and subscribers. This data allows you to conduct meaningful AB testing, to identify patterns and trends, and to personalize your products and services to your subscribers.
As your business cycles through the art and science of subscriber acquisition, you not only build your database of customer information, you are able to target it so that you can answer more nuanced questions. What is the ideal time to offer an upsell or cross-sell to a new customer? Which customers will find a specific bundle of products and/or services attractive? How can you engage your customers in word-of-mouth referrals or spontaneous testimonials? How can you adapt your customer service to avoid losing subscribers? How do you know when down-selling makes sense? If you do R&D, which new products or services are most likely to be successful with your established client base?
Equally important, you can measure key revenue metrics like monthly recurring revenue, customer acquisition cost, and lifetime customer value.
- Recurring Revenue: What is your growth trajectory? Is customer churn balanced by new customer acquisition?
- Customer Acquisition Cost: What is the effectiveness of your advertising, marketing, and sales dollars? When can you can establish a “break-even” point for new campaigns?
- Lifetime Customer Value: Who are your most and least valuable customers, in business terms? Where should you cap acquisition costs? How do I balance new customer acquisition costs and customer retention costs?
Subscriber Acquisition Strategies
Hopefully, you have a sense for the art and science of subscription acquisition. But, how do you actually get started? There are myriad models you can use for subscription sales. We’ve outlined the most popular ones below. Your team at BluSynergy is happy to sit down with you to identify the best model for your unique business, vision, and goals. And, remember, split testing two artfully designed campaigns can help you identify the most effective long-term subscriber acquisition strategy using the science of big data.
- Free Trials: Free trials allow prospective subscribers to try your product(s) and/or service(s) before they commit to a subscription. This is especially important if what you sell has unique features compared to your competitors or if your product is innovative. Here, think CBD oil or IT support not cotton balls or copy paper.
- Promotions and Discounts: If you read our earlier blog about discounting subscriptions, you know that everyone loves a bargain. This is more common in the B2C arena but B2B companies are getting creative about discounting. Promotions and discounts not only create buzz, they increase brand awareness and encourage “taking a chance” on an unknown product or service. They can be targeted to a specific target demographic, have a time limitation that encourages purchasers to “buy now,” or offer a bigger discount as the purchase price increases.
- Upselling, Cross-Selling, and Bundling: Often, businesses, whether in the B2C or B2B space, think of upselling, cross-selling, and bundling as appropriate only for existing subscribers. As with anything else in business, it depends on your customer. Upselling, cross-selling, and bundling are logical at the end of a free trial or after someone purchases at a discount. But, don’t forget that the business that bought a new copier will not only need more toner, they will need paper, ballpoint pens, and perhaps coffee.
- Gift Subscriptions or Buy One/Give One: Like discounting, gifting is another great subscriber acquisition strategy. And, it works just as well in the B2B space as it does in the B2C space. For years, Constant Contact allowed businesses to gift a free subscription to a nonprofit. Some businesses gift supplies to schools and nonprofits. This generates great free publicity for the company and lets customers bask in the afterglow of goodwill. When a gift subscription or give away runs out, many people will have converted to brand loyal customers and they will renew themselves.
At BluSynergy, our team is here to support you in adapting to the subscription economy. Let us help you design a subscription sales strategy that integrates seamlessly into your current business model. We believe there is always room to grow!
Give one of our BluSynergy sales consultants a call today at 731-INVOICE (731-468-6423).
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