Important Subscription-Based Monetization Trends to Keep an Eye On

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Businesses that plan for long-term success need to be willing to make changes along the way. Sometimes it’s consumer needs that trigger changes in product lineups. Efficient monetization is about effectively converting market demands into profits, and a successful business is one that will find a way to get a jump on the competition.

One way to peek into that crystal ball is to look at trends within your industry. While trends may point to future opportunities, incorporating them successfully into your business model is dependent on many factors. After all, your business can’t delve into new technology applications without having the proper support and infrastructure already in-house.

The subscription economy itself was the product of a growing trend that started more than ten years ago. If there’s a market need, the subscription economy wants to provide a solution—not just for the here-and-now, but also to ensure customer loyalty in the future.

When looking back at top subscription monetization trends for 2019, we wanted to know: are the predictions holding true, or did some of these trends fizzle out?

Here’s our take on seven of those trends.

1. Customer experience (CX) is as—or more—important than the product itself

With the changes in the traditional sales model, from one-time purchases to the subscription model where customers are invoiced on a continual basis, the customer experience is undergoing a transformation.

A successful subscription needs to provide a quality experience for a customer from the beginning of the relationship through the entire duration of the customer journey. If for any reason a customer doesn’t feel like they’re valued, your competitor is all too ready to tempt them away from you.

Is the CX still as important as thought leaders suggest? Hotjar is a tool that combines analytics and feedback to give its clients a better understanding of their website users. In a recent survey, Hotjar found three out of five ‘mature’ businesses—those that self-report to have a solid grasp on customer experience—had their CX metric increase over the year, demonstrating an increased focus on essentials such as:

  • customer satisfaction
  • reducing churn
  • increasing customer retention, and
  • providing solutions the first time a request is made.

Additionally, three out of every ten mature businesses have over half their employees involved with CX initiatives, reported Hotjar. With so many employees involved, it’s apparent that best-of-breed CX initiatives aren’t limited to customer service departments. They’re multi-dimensional and span a variety of functional areas, from sales to web design to marketing and the C-suite.

This trend is looking to stay hot on peoples’ minds.

For example, Amazon recently employed artificial intelligence (AI) to transform its customer service. In the past, if a customer didn’t receive a package, a chat session could take several minutes to find a resolution. However with chatbots, a customer can have an answer in well under a minute. The faster a customer can find resolution, the more satisfied he’ll be.

2. Services continue to move outside the box

There’s nothing more frustrating than rushing to start a load of laundry before you grasp the fact that you forgot to buy more detergent.

Businesses engaging in subscription monetization are increasingly making it more convenient for the consumer to get the goods or services they need before they need them. Think of a ‘smart’ refrigerator that can order the groceries for you.

No matter what they’re offering, this question is being asked by businesses across the board: “Is it possible to turn our product to one that people would buy on a subscription basis?”

Is the trend continuing?

While some claim ‘subscription fatigue’ is starting to burst the recurring revenue bubble, the numbers are suggesting the trend will endure.

One report claims 34% of Americans say they plan to increase their number of subscriptions over the next few years.

Those numbers could go up even more as businesses find other outlets for their products, from ugly vegetables to pillow subscriptions.

The growth in subscription offerings is being matched by a growing number of apps like SubscriptMe, Bobby, and Subby. All of these are designed to help consumers manage their subscriptions and stay on top of their spending and the value they're getting out of them.

Is this an indication that the subscription fatigue phenomenon is spreading? It may be too early to tell, but you can be sure it’s something the subscription industry will need to keep in its sights.

3. Subscription competitors will duke it out for customer loyalty

Anybody who has a product is going to explore turning it into a subscription. Not only are subscriptions convenient for users, but being able to offer lower prices on a continual basis versus one large up-front payment reduces the economic barrier for many customers.

But it isn’t going to be easy. Just ask the meal kit industry. If there’s a diet restriction or preference, there’s a meal kit for that. Yet Neilson reported that only 9% of Americans have even tried a meal kit, and some predictions suggest many of the meal kit businesses will be shuttered by 2025.

In his book Superconsumers, Eddie Yoon writes, “All brands will try to offer subscriptions, but only a few will take.”

One of the biggest factors is going to be customer loyalty. According to one study, 61% of retailers say customer retention is their biggest obstacle, but just a 5% increase in customer loyalty would increase their profits per customer by 25-100%.

SaaS giant Adobe reports that the top 10% of a customer base is spending three times more per order, and that repeat customers are also buying nearly 30% more items than those making a purchase for the first time. With figures like that, it’s no wonder securing customer loyalty through new selling strategies, pricing, and other features is paramount.

One important way to keep customers engaged is through loyalty programs. Customer loyalty association Loyalty 360 has concluded that more than 92% of brands have seen measurable results through loyalty programs.

Loyalty programs are stepping up their game beyond discounts and free shipping. Successful programs are now employing data analytics to understand their customer segments better and market their products toward specific interests. This strategy taps into a customer’s emotional satisfaction. Developing a successful emotional bond is essential to capturing loyalty and extending the customer lifecycle.

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4. Customer experience relationship management (CERM) is gaining momentum

So, we’re no stranger to customer relationship management (CRM) platforms, and most of us have heard about customer experience management (CEM) strategies. But what, you may ask, is CERM?

CERM underscores the importance of both the customer and your relationship with them, going well beyond managing their details and delving into how to enhance the business-customer relationship.

CERM aims to eliminate siloed interactions to create a more seamless customer experience. It’s not just about the customer journey, as mapped out in CRM, but also the customer experience.

“It is difficult for businesses to get a complete understanding of the customer journey,” said Genesys CEO, Paul Segre. “That's why we are particularly proud that we are already helping 11,000 brands around the world remove the barriers between customer-facing departments, enabling the kind of holistic, consistent experiences consumers demand.”

Genesys is one of the major players highlighted in a report released in late 2018, in which Gartner reported the CERM space has grown 15.5% to $42.14 billion. In that report, Gartner credited the growth as primarily being driven by the agility and flexibility of SaaS businesses.

As businesses continue to underscore the need for a fluid customer experience between channels and communication platforms, this trend will undoubtedly continue to grow.

5. Predictable revenue and preventing revenue leakage continue to be focal points

Gartner has predicted that by 2020, “all new entrants and 80% of historical vendors will offer subscription-based business models”.

Businesses across industries continue to equate longevity and survival with a switch to subscription offerings. John Warillow, author of The Automatic Customer, sums up the importance of recurring billing this way:

Because a high percentage of the revenue of a subscription-based business is recurring, its value will be up to eight times that of a comparable business with very little recurring revenue.”

At the same time, subscriptions are only as good as the revenue they generate. To this end, there’s an ongoing focus on optimizing subscriptions and stopping revenue leaks. One of the most effective ways to accomplish this is through comprehensive subscription management and recurring billing automation.

6. User privacy and data management remains a prevalent concern

Data breaches are a major concern for both customers and businesses alike.

In the first half of 2019, Forbes reported that data breaches exposed 4.1 billion records. Those figures are from 3,800 publicly disclosed breaches. But what’s even more disconcerting was that eight of those breaches accounted for 3.2 billion of those records.

These breaches often involved misconfigured databases or services. However, there were a large number due to human error, including faxing the wrong recipient or emailing either incorrect or blind-copied recipients.

Data breaches will undoubtedly continue to be an issue, even though many institutions are taking measures to reduce the occurrences. For example, the California Consumer Privacy Act was signed into law in June, 2018 and will go into full effect by 2020. This act will restrict the way businesses can collect and use customer data.

Tighter security measures will undoubtedly bring more customers to businesses that are held to stringent security mandates, such as PCI compliance—the standards a business has to maintain to ensure credit card security.

7. More industries enter the subscription business ecosystem

As noted earlier, more businesses than ever are looking at subscriptions, and that trend will most definitely continue, as it will for a multitude of sub-industries.

The healthcare industry is a prime example of a traditional model transitioning to a subscription-based one. With technology supporting virtual office visits, companies such as Doctor On Demand have married the convenience of an office visit from your home to the expert advice of trained medical professionals. In fact, Kalorama Information is predicting that by 2020, the virtual healthcare market could reach $86.6 billion.

Also, as technology and devices have become cheaper and smaller, other industries such as telematics continue to grow in popularity. Similar advances are making virtual reality (VR) and augmented reality (AR) more widespread.

For example, 7Eleven teamed up with Deadpool to generate a unique loyalty program with a movie-themed twist. Users could go through the store with their app engaged and snap selfies with virtual Deadpool characters to earn points. Within the first three weeks, six million photos were taken, earning users 85.7 million loyalty points.


We have a unique front row seat to the dramatically-changing subscription model as more businesses continue to explore subscription monetization. What sectors and industries will lead the race and where will the biggest disruptions break through? With such a rapid pace of technology-driven change, it remains to be seen.  

Nothing is guaranteed, though. Just ask Netflix and Amazon Prime—both part of a market becoming saturated with competitors. With customers showing signs of subscription fatigue in the subscription video on demand (SVoD) sector, it will be interesting to observe how businesses in other industries can maintain customer loyalty and keep a step ahead of competitors.

Tags: SaaS Subscription Management Subscription Business

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