Study: UK users value subscription flexibility
June 21, 2023
Findings from subscription management and billing platform Recurly suggest that UK consumers have an appetite for subscription services, but are demanding in their criteria for continued loyalty.
The company’s report, State of Subscriptions: What Consumers Want, explores consumer subscription spend and trends across key markets.
Despite the cost-of-living crisis, the data paints a positive picture for UK consumers’ appetites for subscription services with an estimated 44 million new subscriptions over the last 12 months; notably Gen Zs (£49 [€57.30]) and Millennials (£50) are spending more on average per month than Boomers (£35).
“It’s promising that there is still a huge consumer appetite for subscription services, but it’s clear that consistency in both pricing and loyalty are the stand-out criteria for success in a fiercely competitive arena,” notes Theresa McEndree, CMO at Recurly. “The cost of living is hitting consumers hard, and they aren’t willing to stick around unless they are getting the best content from streaming services or compelling products from retailers—all for a great price.”
However, rising prices are causing consumers to become pickier, with almost half (47 per cent) cancelling at least one service within the past year due to a general need to reduce their own expenses (37 per cent) or because of price increases (36 per cent). To resolve this, the results indicate that loyalty incentives are important, with nearly 60 per cent of people suggesting that rewarding them for their loyalty would be the most likely way to make them feel like a valued customer. Within this, subscribers prefer financial rewards through lower subscription prices (76 per cent) and discounts (74 per cent) rather than unique products (46 per cent) or gift cards (36 per cent). If providers choose to offer cheaper subscriptions with longer ‘lock-ins’ they can help reduce the churn rate by 42 per cent, securing longer engagement with improved recurring revenue streams.
With regard to initial sign-ups, ease of cancellation (84 per cent) is the factor most likely to attract new subscribers, slightly more so than free trials (82 per cent), exclusive products or services (66 per cent), and free gifts (70 per cent), reflecting that so called ‘dark pattern’ practices that make it very easy to sign up but extremely difficult to cancel are not beneficial to subscriber relationships. Personalisation is also key, with features like the ability to upgrade or downgrade subscriptions as needed (83 per cent), customise plans and pricing (81 per cent) and add items when required (78 per cent) all sitting high on consumers’ priorities.
Notably. the data also shows that if providers choose to offer cheaper subscriptions with longer agreements they could help reduce churn by 42 per cent and improve recurring revenue streams.
“Acquisition, retention and scalability are necessary for long term success in subscriptions, and creating a brilliant subscriber experience will achieve this,” suggests Oscar Wall, General Manager – EMEA at Recurly. £Cost obviously matters, and one way to capture a greater number of subscribers is to offer a number of plans at different price points to appeal to those with smaller budgets.”