Building Resilience in Your Subscription Commerce Business

Emmanuel Synthesis

Emmanuel Oluwatobi Ojo, Marketing, Synthesis Systems

Following the coronavirus pandemic, the world now faces a looming global recession. Businesses across industry verticals will continue to feel this economic strain, especially as customers restrict their spending further during tough times. Businesses that want to survive the economic uncertainty ahead must consider utilizing subscription models.  

Subscription models are resilient and can withstand economic stressors by quickly and easily adapting to customer demands, thus increasing customer life-time value and creating predictable, recurring revenue. Subscription commerce, for example, demonstrated resilience throughout the pandemic by growing from approximately $70 billion in 2021 to reaching a nearly $200 billion valuation by 2023, with a compound annual growth rate of 64.4%. In addition, despite the recession, experts project it to surpass the trillion-dollar mark by 2027.  

The resilience of subscription commerce, along with all subscription industry verticals, emanates from the strong customer relationships and predictable recurring revenue generated by optimized subscription models. Below, we’ll go over both in a little more detail.  


Strong Customer Relationships 

Subscription commerce allows organizations to place their most valuable asset – their customers – at the forefront of their business by giving customers a variety of options and catering subscription offerings to their tastes. Examples of this may be preparing tiered offerings allowing customers to upsize or downsize the product or service they receive, adjusting the frequency or method of their payments, and adding in referral incentives and loyalty perk programs. Giving subscribers the experience they want promotes strong, loyal, trusting relationships, wherein loyal customers are less likely to churn, more likely to repeat and increase their spending, and even refer others to your product or service. In fact, loyal customers are on average 22x times more valuable to a business than the average customer, so promoting strong customer relationships in your subscription commerce business should be a top priority to maximize customer lifetime value for ultimate stability and resilience.  


Predictable and Recurring Revenue

Subscription commerce benefits from a recurring and reliable stream of revenue generated from your loyal, retained and satisfied subscriber base. The systems and tools in place needed to successfully run a subscription business will allow for optimized and automated payments, smoother customer experiences, better cash-flow management, and simpler revenue projections. They’ll also reduce the amount of human-intervention required to process customer transactions, thus reducing errors and time-consuming, automatable work. In turn, your valuable employees will be able to truly focus on scaling and optimizing your subscription business, thus leading to increased recurring revenue for maximum resilience.  

Automation and diversification of subscriptions offerings is an ideal opportunity to increase your customer base, create new revenue streams, and promote the most profitable long-term business outcomes. And, while strong customer relationships and recurring revenue are just two of the many benefits which subscription business models offer, these business models need to be optimized in order for subscription commerce companies to truly reap the benefits.  

If your business is looking to erect defenses in the face of economic uncertainty and increase its resilience, Synthesis experts can evaluate your business needs, develop strategies tailored to your goals, and implement solutions for any stage of your subscription journey. Talk to us today.