We’re excited to announce the release of Chargebee’s 2023 State of Industry Report. In this comprehensive study, new research reveals compelling insights about the strategies and tactics of 300+ subscription business leaders – pointing to a shift in the trajectory of the subscription industry, which we call the “Retention Era.”
Here are some key insights directly from subscription leaders:
96% believe customer cancellations can be addressed
The optimism among our survey respondents reflects a growing industry awareness of the factors driving churn and the potential for proactive strategies to combat customer attrition. By understanding pain points and offering personalized solutions, businesses know they can proactively minimize cancellations and cultivate lasting customer loyalty.
87% prioritize customer retention
…at an equal or higher level than acquisition, highlighting the importance of keeping existing customers for long-term prosperity. By prioritizing retention, businesses can construct a loyal customer base, amplify the impact of word-of-mouth referrals, and enhance the lifetime value of each customer. Indeed, it is a sound business strategy considering it is up to 25 times less costly to retain a customer than to acquire a new one.
Rising Churn: 64% expect churn rates to rise
While revenue growth expectations remain on the rise, subscription businesses grapple with rising churn rates. This emphasizes the importance of implementing proactive measures to address churn while maximizing the value of retained customers. Balancing growth and retention strategies to thrive in the subscription industry is crucial.
Investment Priorities: Technology for Acquisition and Growth
The #1 concern for subscription businesses in 2023 is keeping up with the rapidly changing market and technological trends, cited more than 2x as commonly as the second-most important concern, acquiring new customers. Perhaps to assuage that concern, subscription businesses are increasing their budgets in technology and technology and tools, the top investment category in our 2023 survey. Businesses are embracing AI-driven analytics, customer relationship management systems, and personalized marketing automation to provide exceptional customer experiences and fortify their retention strategies.
79% of subscription businesses anticipate revenue growth
Optimism abounds in the subscription industry, as 79% expect growth this year, highlighting confidence in capitalizing on the Retention Era. Through data-driven strategies, leveraging customer insights, and delivering personalized offerings, subscription businesses can unlock revenue growth while fostering enduring customer relationships. It’s a winning combination that paves the way for success in the dynamic subscription landscape.
Anticipating Price Increases
The subscription industry is preparing for potential price adjustments, as 62% of businesses expect prices to rise. Striking the right balance between price adjustments and delivering perceived customer value is paramount to minimizing churn risk and maintaining a strong customer base.
Businesses must be agile, employ effective retention strategies, and allocate investments wisely. Those who strike the right balance between customer acquisition and retention will lead the industry. See all the statistics and trends for today’s subscription businesses in Chargebee’s 2023 State of Industry Report.