4 Statistics that Prove Brand Loyalty is Vital to Subscription Billing Business Growth

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Four minutes. The Amazing Race contestants Blake Mycoskie and his sister Paige missed out on a $1 million prize by four minutes while racing around the globe. However, the experience led Mycoskie to Argentina, where he was moved by seeing children who had no shoes.

“What if I sold these really cool shoes that I had only seen in Argentina to my friends back in California, and every time I sold a pair, I would also make another pair to give to one of these kids?” he mused in a journal entry.

Thus, “Tomorrow’s Shoes,” later shortened to “Toms” was born.

Since its inception in 2006, Toms has given more than 100 million shoes, and has provided further humanitarian assistance with impact grants, safe water systems, and a sight restoration program. And while the business was built on giving back, its brand recognition, one of the cornerstones for brand loyalty, is very strong.

According to Forbes, Toms tops the list for corporate philanthropy. This increases customer loyalty by sharing a ‘cause’ and inviting customers to engage, which, in turn, gives back to those in need. While almost 70% of customers claim it’s more difficult for a business to keep their loyalty, the Toms brand story keeps customers emotionally involved and coming back to make future purchases because of the ‘feel good’ result.

It costs five times more to attract a new customer than to retain a current customer. So, while new customer acquisition is a key part of growing a healthy business, retaining the customers you already have is essential.

Toms makes it look easy, but brand loyalty can be harder to come by with increasing competition, a digital economy, and customers who are more apt to test new waters than stay with one brand.

According to one study, between 90 and 95% of customers simply aren’t loyal to one brand anymore.

How can subscription billing businesses truly go about developing, or maintaining, brand loyalty?

Changing the face of developing your customer loyalty

The concept of customer loyalty has been around for a long time; just ask a die-hard iPhone user, or the person who cannot start their day without a Starbucks chai latte. As fluid as the marketplace is, so too are the trends that emerge in response to different markets.

Customer expectations change, product delivery methods change, and thus, loyalty shifts. Adapting to emerging trends is essential for meeting your customers’ needs.

Here are a number of different trends influencing or emerging from current markets.

1. An estimated 10% of your customers spend up to three times more than the average customer.

Get to know your recurring revenue customer base because familiarizing yourself with your different customers helps uncover some interesting trends. Someone who makes a one-time purchase is going to impact your business much differently than someone who is a loyal subscriber.

A report by Adobe breaks its customers into three segments:

  • shoppers (including visitors who don't make purchases)
  • returning purchasers (who've made one prior purchase), and
  • repeat purchasers (who make multiple purchases).

That report determined the top 8% of purchasers generate 40% of all purchases. And for every 1% of shoppers who become purchasers, overall revenue will increase by 10%.

It’s critical to be able to use your metrics and reporting to determine the top 10% of your customer base because they’re essential to the health of your company.


2. More than two thirds of all customer churn is preventable if an issue is resolved during the first encounter.

Churn is inevitable, but if a business can resolve a problem immediately they can—for the most part—retain that customer.

A Huffington Post article by Salesforce’s Vala Afshar highlighted data provided by Estaban Kolsky, founder of ThinkJar. In the data, Afshar revealed that 25 out of 26 customers who were unhappy with a business simply left without conveying a potential problem.

That leaves 1 out of 26 customers who will make a business aware of an issue. As a business, you should be prepared to address that issue immediately because 67% of churn can be avoided if the issue is resolved on the first encounter.

Your subscription billing business can keep its competitive advantage by having an exceptionally-trained customer service team that can help mitigate customer concerns, immediately. Nearly one-quarter of customers say a business will lose its loyalty because of poor customer service.

Customer service isn’t created equally though. There are three primary roles in customer service management (CSM), and you need to make sure your team is equipped to fulfill all of them to help keep customers happy, and thus reduce your churn rate.

3. Lifetime value (LTV) is four times higher when customers feel an emotional connection to a business or product

In the summer of 2018, a JetBlue flight from Florida to Massachusetts made headlines when a French bulldog started going into respiratory distress. Flight attendants jumped into action, and treated the dog for hypoxia, covering its muzzle with an oxygen mask.

It’s stories like this and JetBlue’s consistent customer service that routinely puts it in the top for customer satisfaction among low-cost carriers.

Motista—a predictive intelligence business—released a study in 2018 after compiling data from 2016 to 2018 on over 100 retail businesses. It discovered that customers who feel an emotional connection to a specific brand will often spend as much as twice the amount of money as a customer who's simply satisfied with the brand.

In fact, the report states that an emotionally-connected customer:

  • has a 306% higher LTV than a satisfied customer
  • stays with a brand for an average of 5.1 years, versus 3.4 years for a satisfied customer, and
  • recommends brands at 71%, versus 45% for a satisfied customer.

4. Nearly half of all customers will abandon a business if they're disappointed with the brand.

Brand loyalty is a beautiful thing—until the relationship ends, that is. A study conducted by the Chief Marketing Officer (CMO) Council revealed brand loyalty only goes so far. The study found customers will abandon a brand if they regularly encounter inferior customer service.

If their frustration isn’t turned around, 32% of customers will complain, 29% will pass their experiences on to family and friends, and 47% will simply stop doing business with that brand and will take their money elsewhere; likely to a competitor.

No subscription billing business is going to keep all its customers happy all the time. However, a solid plan to address customer disillusionment is critical to turning the ship around and making them satisfied, loyal customers once again.

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Building brand loyalty for your subscription billing business

Brand loyalty is exactly what it sounds like—a relationship between your customer and your brand. While there are different ways to cultivate brand loyalty, there are some key patterns.

1. Know your customers.

First and foremost, a business needs to know who its ‘ideal customers’ are. Growing your customer base is not about pulling in as many new people as you can, but rather acquiring customers who are a good fit for your product.

Determine your ideal customers and develop profiles of the attributes that matter most to your business, such as interests, occupation, education, income, and other factors such as behavior patterns and motivations.

Building customer personas is a powerful method to harness real data and other information such as market research to develop these customer profiles. Why make the effort? Knowing your best potential customers will “help you determine where to focus your time, guide product development, and allow for alignment” in your business.

It isn’t just about identifying that perfect customer and marketing to them. Keep in mind your competitors are doing the same thing, often with the same demographic and similar products. Your business has to do more to make your brand rise above the competition, such as quickly responding to market demands.

With better support for monetizing products, such as agile billing, businesses can quickly respond to a shift in the market and release product updates within weeks, versus months.

You need to connect with your customer, first and foremost. If you don’t tap into their needs, they won't see the value of your product.

However, a one-time connection won’t sustain loyalty either. To maintain engagement and a relationship with your customers, you need to take the pulse of those relationships consistently. In the subscription billing business environment, customers may appear to be satisfied simply by virtue of not expressing dissatisfaction, but it’s often the quiet customers who may be about to leave.

2. Provide superior customer experiences.

What exactly do we mean by customer experiences? For starters, it takes place every time your customer reaches out to you, or vice versa. It can be in the form of:

  • sales calls
  • CSM interactions, or
  • email communication.

It’s essential to respond to customer calls quickly. You can do this by trying to keep enough support staff available to keep call queues down. Or consider specializing your CSMs. More on that below.

Regardless, a business that cultivates brand loyalty sees the need to give customers positive experiences by supplying superior customer service, and immediately attend to any negative incidents.

3. Keep yourself within your customer’s awareness.

Customer communication shouldn’t just be limited to sending an invoice; you also need to reach out to customers to keep your brand visible.

There are different ways to do this, such as contacting them with product updates, and sending ‘tech touches’—emails to highlight new products or features.

Regularly scheduled newsletters can highlight new features, underscore the history of your company, provide customer profiles, and make your company come to life with employee spotlights. You want your customers to feel like they're part of your team, so tell them who their ‘teammates’ are.

Even if your customer has good experiences with your business, they’ll tend to forget you unless you keep yourself in their awareness.

4. Make customers feel valued.

Customers don’t want to feel like a number. They want to know you truly appreciate their business.

Ask yourself, what would make you feel important if you were the customer? What touches would you like to see? This awareness can help you provide a superior level of attention.

One way to do this is by sending them surveys, and make sure to address those findings in upcoming communications. If customers know you truly appreciate their opinions and are actively trying to improve based on their suggestions, loyalty will grow.

5. Continue to deliver first-class customer support.

According to a Forrester report, 73% of adults say good online customer support needs to be readily available or else they don’t feel like they’re being valued. In fact, if a customer can’t find a quick answer to their question when shopping online, 53% say they’ll abandon the purchase.

However, customer service needs to be available in different mediums. For example, if a customer has a question, Amazon customer support often gives them multiple options: online chat, email queries, or a phone conversation.

A new trend is allowing customers to provide their phone number to receive an immediate customer service call—no need to navigate through a phone tree and wait in a call queue.

Another trend in customer support is to have dedicated help desk groups. These consist of specific people trained to provide specific support for a few products, versus generalized support with all your products.

Establish quality business practices in your subscription billing business

Determine who your ideal customer is, drive your marketing toward that demographic, and take all possible measures to establish brand loyalty by making them feel an emotional connection with your products.

Your customers support your business, while you support your customers. It could be a fragile ecosystem, but the possibilities for success are wide open.

Focusing on brand loyalty not only works toward sustaining solid customer relationships, but it also nurtures high-quality business practices that will contribute to the long-term success of your subscription billing business.

Tags: Customer Service Subscription Business

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