Most businesses right now are suffering as a result of the current Coronavirus pandemic with many of their customers confined to their homes. In any major economic disruption, some industries will lose out and others will gain. The Coronavirus is no exception. One industry that has many companies experiencing growth during this challenging time is those with subscription-based business models. A prime example of this is streaming platforms, such as Disney, Amazon Prime and Netflix, who are all enjoying a huge boost in viewing figures as cinemas remain closed. In fact, the subscription e-commerce market, as reported by McKinsey, has grown by more than 100 percent a year over the past five years.
Nevertheless, despite evidence of growth, just like any industry in the current marketplace, subscription-based companies are still operating in a highly competitive world and face challenges when it comes to customer acquisition, churn rate, the ease of cancellations and delivering a superior customer experience (CX). It’s not just the quality of your product that is a deciding factor amongst buyers today, in fact with so many businesses offering comparable products it’s the entire customer experience that can provide a real competitive advantage.
Whether you have a subscription business that is benefiting or losing out as a result of the current climate, both situations can result in a need for enhanced and scalable customer service to either handle increases in orders or enquiries. To help you through this challenging time we caught up with Justin Stone, People Services Operations Manager at GFM ClearComms, who shared with us his ‘6 Top Secrets on How to Grow Your Subscription-based Company’, which is particularly relevant right now during these peak demand times.
Whether your cycle of billing is weekly, monthly, or annually, this period of time puts increased pressure on your already limited customer service resources. This is even more pertinent right now during a time where people might have less job security or be experiencing financial difficulties as a result of the Coronavirus pandemic and therefore may well look to reduce monthly costs. Customers will be calling to ask a variety of questions regarding their membership, future payments and even cancellation. It’s unlikely that you are prepared for this temporary increase in demand, and most subscription-based companies simply make do and survive until it’s over. However, this approach is not an effective one from a long-term perspective, often leading to declining customer service standards and therefore cancelled subscriptions and lost revenue.
If you find your business is constantly struggling to upscale your resources and personnel for peak contact periods, outsourcing your customer service to a contact center can help significantly. By using an outsourced call center, your business will have access to experienced customer service representatives, specialised industry knowledge and the latest innovations in technology – all of which will be significantly cheaper than trying to implement these skills into your own in-house team or hiring lots of new temporary staff members, which can be expensive and take even more time away from your team during these business critical times. This is obviously made even more difficult during periods when people are required to self-isolate.
One of the major benefits of working with a contact centre is their ability to more accurately forecast call volumes using historical data, tracking, and various other statistics. As a result, this will enable you to have sufficient resources in place so that you can effectively handle these calls quickly and efficiently. The great thing about outsourcing your call handling services is that the provider will have a large workforce of agents who can remotely be allocated to your customer service requirements on an as-needed basis. In addition, having more agents will reduce wait times for your customers, which will subsequently increase their satisfaction.
Netflix is one of the most popular subscription-based companies in the world, and one of the biggest reason why is their convenience. You can watch movies at any time, on any device from any location you want. Convenience is also likely to be one of your company’s strongest assets, and your customer support channels should be no different either. 24/7 customer service support will allow your company to offer round-the-clock customer care – if customers don’t receive this with your brand, they may well move on to your competitor.
However, providing 24/7 support is not always possible in-house, particularly if you are operating internationally and today it is not just about being available on the phone, different customers naturally have different contact preferences. The subscription business model is about offering a superior customer experience across multiple channels, while focusing on retaining existing customers and delivering ongoing value to increase loyalty. Contact centres specialise in being able to provide omni-channel customer service for a wide range of clients who all have different needs; whether that is phone, e-mail, live chat or social media. This makes them a great option for times like now when special circumstances may have you wanting temporary 24/7 support. Contact centres have a lot of options that can meet your businesses’ specific needs including working and training remotely, thus allowing you a cost-effective option for making temporary or quick changes to your customer support. This allows you to quickly deal with customers based on the level of service they require and you can also then prioritise calls based on these needs.
Something you may already be aware of is that more than one-third of consumers who sign up for a subscription service tend to cancel in less than three months and over half cancel within six months. With subscription-based companies relying on loyal customers and long-term relationships to ensure they can reliably predict revenue, customer churn is and will always be a significant challenge. Naturally, the higher the churn rate, the more difficult it becomes for subscription companies to scale their revenues.
When also considering the fact that it supposedly costs five times as much to attract a new customer than to keep an existing one, it is clear that for all subscription-based companies saving a sale and reducing churn is arguably just as important as attracting new customers. Most large companies generate just 15 to 25% percent of their revenues from brand new customers. Outsourced call centres have the expertise, technology and resources to help your company do just this. By using expertly trained customer service agents across various communication channels, an outsourced call centre will be able to reduce subscription cancellation rates for your company.
Many subscription-based companies allow customers to easily cancel their subscription online and then fail to follow these cancellations up. By leveraging an experienced call centre representative they can address any concerns your customer has and cancellations can subsequently be reduced significantly. For example, at GFM ClearComms we specialise in retention call handling and a major beneficiary of this was our client The Times – we were able to increase their customer retention up from 35% to 55% handling over 350,000 contacts per year.
The importance of customer retention during times like now cannot be overstated; especially as many people will also be feeling the financial impact of the current state-of-affairs. Outsourcing your customer support provides the attention your customers need and helps you ensure that you don’t leave customers feeling ignored and unvalued. Existing customer satisfaction is arguably more important right now than looking at ways to generate new business once normality is restored.
Customers today can easily browse and compare billions of products online and therefore it can be extremely difficult to generate and maintain customer loyalty, which is naturally the foundation from which a subscription business is grown – with sustainable recurring revenue growth. Customers could visit your site once, buy the product they were looking for, leave and never interact with you again, even if you continue to market to them. As discussed already, if you don’t develop a strategy around keeping the customers who have already signed up, your churn rates will be high. To continue subscribing, consumers expect personalized subscriptions to become more tailored over time and is undeniably a key reason for continuing to subscribe. Businesses depend on long-term relationships to provide predictable revenue growth and deep insights into customer behaviour to personalise the experience further.
To be successful at upgrading existing customers, subscription-based companies must develop a strategy that sees their customer service program leverage innovative technology to collect customer data. You need to provide customers with intuitive and comprehensive tools to manage their accounts over the entire subscription life cycle. A common mistake many subscription-based business marketers make is not learning about their subscribers by getting insights before they change anything. Real-time data is about making use of relevant data to understand your customer’s behaviour, and, in turn, using that to make meaningful decision to optimise their experience. Agents can review data and script changes in real-time to personalize the customer service to a specific customer. By taking advantage of customer messaging platforms and sending personalised video messages, you can ensure you are building stronger relationships.
More than just paying for your products or services, customers need to feel connected to the culture of your brand. The creation of strategic loyalty programs that reward customers for their loyalty will enable you to reinforce to your customers that they are valued. These programmes may well result in even more customer enquiries if it is different to what your competitors are doing and this is yet another reason why outsourcing your customer support services can be hugely beneficial, allowing you to focus on more business-critical tasks.
As we have already established, acquiring new subscribers is critical, but in the subscription economy, the vast majority of customer transactions consist of changes to existing subscriptions: renewals, suspensions, add-ons and upgrades. As the cost of acquisition for subscription businesses is undeniably increasing it has become the most significant factor preventing future growth. To counter this, businesses need to focus on maximising their average customer lifetime value, in order to drive up the expected ROI for each acquisition to a level that facilitates further scale.
You must have the mindset that your subscriber base is a market to sell additional products to, rather than simply a list of clients that receive your subscription box. The most successful subscription businesses are constantly upselling relevant products to their subscribers. For example, if you are a health and fitness business, offer your subscribers exclusive deals on associated food products or equipment; this additional revenue stream really boosts your customer lifetime value.
One of the greatest challenges when trying to scale a subscription box business is how to efficiently package and distribute your orders as they grow in number. Managing fulfilment in-house can often make sense when you are launching a subscription business as it not only requires less capital to fulfil a smaller quantity of orders, but you can also be more ‘hands-on’ with your product, ensuring quality control and product development remains in keeping with your brand ethos as you stay ‘in-touch’ with your growing subscriber base.
However, while there may be some benefits for the company founders doing a turn on the production line when starting small, being hands-on for this time-intensive process isn’t practical for scaling the business. Factor in overheads such as a burgeoning workforce and storage facilities, and it is clear that outsourcing your fulfilment management is a more efficient and scalable solution. Outsourcing generates new businesses costs of its own, so selecting the right fulfilment partner for this is critical to scaling efficiently.
At GFM ClearComms we have over 30 years experience of delivering fulfilment solutions for some of the world’s most loved brands. We can manage your fulfilment services in their entirety from concept generation through to design, printing and delivery as a result of our extensive in-house expertise. You can easily satisfy your customer’s orders, manage your stock levels, free up valuable resources during seasonal surges and fulfil promotional activities without the associated costs of operating a warehouse using our scalable suite of fulfilment services including; bespoke pick and pack, direct mailings and stock inventory management.
The subscription market as a whole is growing rapidly, especially right now when consumers are at home more and with often more free time. For consumers, subscription products offer a convenient, personalised, and often lower-cost way to buy what they want and need all from the comfort of their home. Companies in the space must develop great experiences to complement their great products to avoid high churn rates and to accelerate both growth and profitability.
No matter the quality of your subscription offering without superior customer service your company simply won’t be able to develop a world-class customer experience, which keeps subscribers coming back for and stops them going elsewhere. Your customer service is the only real human connection that your customers will have with your company, and this can make or break your brand identity and value. Successful customer service will lead to loyal customers, increased revenue opportunities, the ability to save the sale, upgrade existing customers and reduce churn. Armed with a specialist customer service team, even complaints and cancellation requests can become an opportunity. Whether you haven’t delivered what you promised, a shipment was late or a product was damaged, expert customer service agents can help turn these negative experiences into a positive one. An experienced and high-tech call centre will have significant value to your brand by developing a customer service strategy that helps deliver a customer experience that keeps your customers coming back for more.
As you can see there are many benefits to outsourcing your subscription businesses’ customer contact and fulfilment services, particularly during unexpected peak activity times; however, it is essential that you choose the right company to suit your needs and maximise your benefits. At GFM ClearComms we have been delivering flexible, end-to-end contact centre services and fulfilment solutions on behalf of some of the largest and well-known brands in the UK for over 30 years. We have the flexibility and scalability to service your needs no matter how big or small they might be and can easily have agents working on your behalf remotely. To find out how you could benefit from outsourcing your contact centre services to us please call 01206 226444 or alternatively email us at firstname.lastname@example.org.
Justin and the GFM ClearComms Team