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The allure of consistent Monthly Recurring Revenue / MRR has driven many businesses to adopt subscription-based model.That is why, more and more businesses are turning towards this business model as it ensures recurring revenue and customer loyalty- which are among the two most valued things in business.
But as whenever there is an excess of anything, pushback follows and we can observe the same thing in the subscription business also as consumers are now bombarded with so many subscription-based options that they are now experiencing what is popularly being described as subscription fatigue.
Nowadays, more products and services are available for subscription, just like the applications one uses on his or her phone. Subscriptions have caused people to spend more money, which has averaged $273 a month per person in the US. Of course, this is because subscriptions offer a steady income to companies, thus many businesses have offered subscriptions to their customers.
But because of these subscriptions becoming a part of people’s daily lives and creating a myriad of options for them to choose, people are easily getting tired of them which is known as subscription fatigue.
In other words, subscription fatigue is a feeling of total exhaustion due to too many subscriptions. Often, such feelings are unanimously contributed by rising interests in streaming services, although they may also be contributed to by other forms of subscriptions. This phenomenon may become more in the future as more and more brands start to provide subscription services and many of them might offer it just for the sake of it without proper testing if this model would add value to their customers' lives.
As we say that with too many companies coming up with their subscription models for different product categories and it’s becoming too much for the customers, this raises some critical questions. Are the happy days for subscription-based business models over with its market getting saturated
Well the data does not give a clear picture about it. While some statistics reveal that 47% of the US customers are getting fatigued off the rising number of subscriptions services. On the other hand, some statistics anticipates that the US consumers are set to spend more on OTT services in the coming years.
Despite the abstract data we can gauge some important things which subscription business could learn such as:
Although most people are curious about new content, tools, and products, many of them simply do not want to start subscribing to yet another service-as in their opinion, they already have too many. Well, this is not the best news for subscription businesses, but that's an opportunity to learn something new. It means subscription businesses will have to differentiate so as to position themselves successfully. People would subscribe to a subscription service because it is special or solves a real problem.
The latest survey from Deloitte reported that almost half of US consumers felt overwhelmed by the number of subscription services. This would invariably lead to a clear conclusion that increased choices do not always result in more satisfied customers.
The described condition, called "subscription fatigue," underlines that people need choices but to some extent only. Companies offering subscription services should take into consideration that too many options make most customers irritated.
For many companies, this shift from one-time payment systems to subscription models can be a problem. A lot of companies miss the big payments they used to get upfront. Secondly, they also have to educate their employees about subscriptions.
Let’s deep dive into the issue of subscription fatigue and try to highlight the key factors that play a prominent role leading to this phenomenon:
This enormous and constantly growing universe of digital subscription services in a range of sectors creates plenty of choices that overwhelm the consumers. Such overabundance may lead to a type of decision paralysis-overload whereby an individual faces mental blockage to choose definitely.
The long list of options can be worse, since such magnitude creates a cognitive burden on users which makes them mentally exhausted and even frustrated by too many choices.
Since subscription fees are recurring, there is a tendency for the charges to build up over time, and possibly lead to stress or even impulsive decisions to cut back expenses. It is at this point that users can start weighing in the value or need they derive from their respective subscriptions, and hence subscription fatigue emerges. This may also be due to an increasing perception that the costs incurred could not, after all, justify the benefits received from the services offered, thus raising questions about the subscription portfolio.
Subscription fatigue may set in when people start to think that their subscriptions have no value or utility. This might be due to one or several aspects: poor quality of the service, higher prices, or some shift in needs or requirements. As satisfaction degrades, loyalty will also do so, potentially opening the floodgate of churn and reduced activity on the service.
It is very administrative to have multiple subscriptions, since it involves tracking of the billing cycles, when the dates are due, and the login credentials. The multiple subscriptions with varied categorical and sub categorical subscriptions bring about complexity in the minds of subscribers, which quickly leads to mental exhaustion.
Besides, users are struggling to try and maintain organization in respect of every subscription to avoid missing payments and forgotten login credentials. It hugely cuts down on the general satisfaction and loyalty of one's user experience, especially considering administration for multiple subscriptions is quite stressful to handle.
The fragmented nature of the subscription management system can lead to a poorer user experience. Differences in billing cycles, user interface design, and procedures around customer support are sure to confuse and frustrate them.
The failure of a unified experience can make subscription management clumsy for users and, in general, may be partly responsible for whatever feelings of fatigue there are on the part of the user about subscriptions. If the platforms are inconsistent with each other, it will kill user satisfaction and loyalty, as users may find this experience very annoying and consuming.
Subscription fatigue is further complicating the process of selling new products and services. Overwhelmed and confused by all subscription options, they will avoid subscribing or cancel already existing subscriptions.
Managing many subscriptions can also make them less interested in using them, reducing the revenue. When these people become unhappy with the subscription, they may lose trust in the brand and cancel any use of the service. This affects the way money is spent because all concentration is based on managing the current subscription and not buying new ones.
Despite the phenomenon of subscription fatigue, subscription business is still a popular business method especially in the e-commerce industry. Here are some of the primary steps subscription businesses can take to minimize the impact of subscription fatigue on their businesses:
The more essential your service is for the solution of a customer's need, the fewer reasons there are for him to cancel his subscription. Of course, it makes a lot of sense: the greater the load of subscriptions a customer has, the higher the chances he will opt for a brand and not service.
The only way to make sure your brand takes precedence is by providing value in the real sense to your customer. For some brands, this would be offering essential products or services that have a recurring nature attached to it.
For example, you are in the fashion apparel industry where because of the ever-changing nature of fashion, the subscription model is something which may not suit your customers. Also, the subscriptions are not a one-size fits all, which is why it becomes crucial for brands to tailor their subscription offerings thoughtfully that provides real value to their subscribers.
Subscription businesses have to be more concerned with how to retain customers rather than acquire new ones for them to thrive. This will be a very important factor in combating subscription fatigue and hence long-term success. By focusing more on retention, brands save from high acquisition costs tainted by subscription fatigue. Retaining satisfied customers is an assurance to the brand of a loyal and growing customer base.
Online subscription business is a very competitive market and with subscription fatigue setting in most people are getting skeptical about subscribing to something. Optimization of pricing becomes vital in such scenarios. Your pricing needs to be competitive, but not at the cost of profitability. Successful subscription brands execute strategic pricing, making the process of acquiring new subscribers smoother and more effective.
Onboarding serves as the foundational step in a customer's journey, setting the stage for their overall experience. To optimize this process, brands should minimize the time gap between the purchase and the customer's ability to derive value from the product.
Subscription brands, in particular, should strive to eliminate any obstacles or barriers that might hinder the signup process. By simplifying the subscription journey, brands can increase the likelihood of converting potential customers into loyal subscribers.
Once you have chosen an appropriate subscription model, you can create differentiation with special privileges. Loyalty programmes and referral rewards work the best. These privileges will attract your subscription to both old and new customers.
A sound loyalty program will retain customers with your brand and make them feel special. Think about rewarding customers with points for purchases they can use to redeem discounts, exclusive products, or other benefits.
Rewards for referrals can come in many shapes and sizes. Incentivizing your customers will get the word-of-mouth marketing happening, and it's one more way you show appreciation to your customers, building on those relationships. Loop Subscriptions customer portal gives you the flexibility to incentivize your existing customers in an engaging manner thus assisting them in deriving full value from your products and leading to higher LTV.
There are various subscription apps also in the market that allow your customers to derive optimum value from your company. You can check and compare the top shopify subscription apps and choose the best one for you
In the subscription industry, the penetrating effect of subscription fatigue can just not be ignored. As it were, this issue at this point has affected some subscription markets more than others. On a positive note, however, it is considered that no matter the mission of your brand, one can take proactive steps to strengthen their customer base and reduce the chances of facing subscription fatigue.
Emma Johnson is celebrated for her strategic brilliance and innovative flair. By seamlessly blending creativity with data-driven insights, she has propelled Loop’s brand to new heights, establishing it as a formidable force in the Shopify Subscriptions space.
