What Is Subscription Lifecycle Management?
Subscription lifecycle management is the process of guiding customers through every stage of their journey with your subscription business—from first discovering your service to becoming long-term, loyal subscribers.
Importantly, it also involves providing value to them at each stage.
Managing this lifecycle effectively ensures a great customer experience, reduces churn, and maximizes revenue.
Here’s how each phase fits into the bigger picture:
🔁 Acquisition
This first stage of the customer journey involves them becoming aware of your brand and choosing to buy a subscription.
Strong marketing, clear messaging, and a frictionless sign-up process are key to turning potential customers into subscribers.
Subscription businesses must focus on attracting the right audience and setting clear expectations to minimize churn later.
🔁 Onboarding
Once customers sign up, onboarding ensures they get set up for success with your product.
This often involves providing:
- Personalized welcome emails
- Tutorial videos that explain your product and how to manage their account
- Easy access to support
This helps customers quickly see the value of your service. The smoother this process, the lower the chances of early churn.
🔁 Billing
Reliable and transparent billing is crucial for maintaining trust. Unexpected charges or confusing invoices can frustrate customers and lead to voluntary churn. Offering flexible payment options and clear pricing helps prevent this.
Meanwhile, automated payment recovery (known as dunning) can reduce involuntary churn by retrying failed payments and sending reminders to update billing details.
🔁 Engagement
Keeping customers engaged is what drives retention. Whether through personalized content, exclusive offers, or loyalty rewards, consistent engagement helps remind customers why they subscribed in the first place. Strong customer relationships also lead to higher lifetime value.
🔁 Renewal
Renewal is when a customer chooses to continue their subscription with you when the previous one expires.
It is a critical moment—especially for businesses with non-auto-renewing plans. Proactive communication, such as reminder emails and incentives for continued membership, can help reduce churn and encourage customers to stick with your service long-term.
🔁 Expand
Growth doesn’t stop at renewal. Encouraging customers to upgrade, add-on services, or refer others can drive more revenue and strengthen their commitment to your brand.
Subscription businesses that offer tailored upsells or incentives for referrals see increased customer lifetime value.
Why Is Customer Lifecycle Management Important?
As mentioned earlier in this article, the subscription business model is becoming more popular than ever, mainly because it provides businesses with regular cashflow.
However, there are also downsides to the subscription model.
- Greater cost scrutiny: Because customers pay you regularly, they are more likely to scrutinize that payment and what they get for it. As a result, subscriptions are often among the first expenses people cut when they face hard times. 28% of people will cancel subscriptions due to reduced personal finances.
- Ease of churn: Most businesses make it easy for customers to cancel their subscriptions, as this makes signing up to their service lower risk. However, this also makes churn more likely.
- You cannot just focus on sales: Most subscription businesses that fail make the mistake of putting all their effort into acquiring new customers but not looking after their existing customers. This means they must put more money into sales and marketing to replace lost customers. As a result, their business becomes impossible to scale.
Customer lifecycle management helps avoid these issues by providing value at every stage of the customer lifecycle. This ensures customers love your brand and products and want to continue their subscription with you.
Top Tips For Successful Subscription Lifecycle Management
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Conventional wisdom says that the more expensive your subscription, the more likely customers are to churn. However, our research shows no correlation between price and churn rates.
This suggests that other factors like market positioning, accurate targeting, product value, customer experience, and service quality impact retention more.
Churn rates also vary by country and product category. For example, stores based in New Zealand have a low churn rate of 5.2%. This figure is three times higher for similar businesses based in the Netherlands.
Meanwhile, subscription businesses in the health sector have a median churn rate of 10%, while those providing animal products and services have a churn rate of 5.8%—perhaps this shows that people care more for their pets than their own health!
With that in mind, here are some ways to provide an incredible experience at every stage of the customer journey.
Use data to improve personalization
Personalization is the key to keeping subscribers engaged and reducing churn. Customers expect a tailored experience, and the best way to deliver that is by leveraging data.
Start by tracking subscriber behavior—what products they engage with, how often they use your service, and when they’re most active.
Use this data to send personalized recommendations, targeted offers, or timely reminders. For example, if a customer regularly skips a certain product in their subscription box, offer an easy swap with something new.
A good example of a business that uses data to improve personalization is beauty subscription box, Birchbox.
Upon signing up, subscribers complete a detailed profile indicating their beauty preferences, skin type, hair type, and style choices. Birchbox leverages this data to curate monthly boxes tailored to individual customer preferences.
Source: Birchbox
For instance, a subscriber with curly hair would receive products specifically designed for curly hair care, ensuring the samples are relevant and valuable.
This personalized approach enhances customer satisfaction and increases the likelihood of subscribers discovering products they’ll love and purchasing more of them.
Engage with customers
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As mentioned earlier, building a strong relationship with your subscribers is essential for long-term success. Engagement goes beyond the monthly delivery; it’s about creating a community and fostering ongoing interaction.
Here are some ways you can engage with customers:
- Host webinars, live Q&A sessions, or virtual workshops.
- Offer subscribers access to exclusive articles, videos, or tutorials related to your products.
- Create online forums or social media groups where subscribers can share experiences and tips.
- Regularly ask for feedback to understand customer needs and improve your offerings.
- Implement loyalty programs that reward subscribers.
- Provide behind-the-scenes insights into product development or company culture to build a deeper connection.
An example of a company that’s good at engaging with customers is FabFitFun, a lifestyle subscription box.
They host exclusive events, webinars, and virtual hangouts for their subscribers, creating a sense of belonging and community.
Provide options to postpone and pause
Life can be unpredictable, and sometimes subscribers may need a temporary break. Offering flexible options to pause or postpone subscriptions can prevent cancellations.
By accommodating your subscribers’ varying circumstances, you demonstrate understanding and flexibility, which can foster long-term loyalty.
According to the Wall Street Journal, the percentage of streaming customers who re-subscribe after pausing increased to 34.2% in the first nine months of 2024, up from 29.8% in 2022.
Offer flexible pricing
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Offering flexible pricing options can cater to a broader audience and accommodate different financial situations.
For example, you may wish to offer a downgrade option for subscribers who may find the cost prohibitive. This strategy allows customers to choose a more affordable plan rather than canceling altogether, thereby retaining their customers.
By providing tiered pricing or customizable plans, you can appeal to a wider range of customers and reduce churn due to financial constraints.
A good example is Bitsbox, an educational service for children. They offer three distinct subscription plans: Basic, Deluxe, and Digital. Each tier provides varying levels of content and materials, catering to different customer needs and budgets.
Source: Bitsbox
Connect with your customers on what they care about
You need to let your customers know that you will give them something they truly value. You then need to reinforce this throughout the relationship.
A good example of this is Petco’s welcome email. Petco provides subscription pet supplies. They know that the health and well-being of their pets are what their customers care about most.
The welcome email shows they share that passion, setting the stage for a meaningful relationship that goes beyond products.
Their messaging is clear, appeals to customers’ emotions, and prompts users to learn more about their rewards programs and other products.
Set expectations with onboarding
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Ensure you send your onboarding email fast. Sending the initial welcome email within minutes increases long-term customer engagement by up to 33%.
This promptness capitalizes on the user’s immediate interest and reduces the chance of disengagement.
Your onboarding email should also let customers know what they can expect both from their subscription and in terms of service level.
For example, here’s what meal kit subscription service Blue Apron covers in its onboarding emails:
- A warm welcome: Upon signing up, subscribers receive a friendly welcome email that thanks them for joining the Blue Apron community.
- Setting expectations: The email outlines what subscribers can expect, including the delivery schedule and an overview of how the service works.
- Encouraging engagement: Subscribers are invited to explore recipes and learn more about the ingredients, fostering excitement for the upcoming deliveries.
- Support and resources: The email links to cooking tips and customer support, ensuring subscribers have the resources to get started.
- Follow-up emails: The company reinforces the initial onboarding email by sending follow-up emails to ensure subscribers get the best out of Blue Apron’s service.
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Provide dedicated support
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Accessible and responsive customer support addresses subscriber concerns and builds trust. By resolving issues promptly, you maintain a positive relationship with your subscribers.
Aim to offer support through a range of channels, including:
💬 Chat
📞 Phone
📱 Social media
❓ Comprehensive FAQs
💡 Cooking tips and resources
This ensures subscribers can access support in a way that suits them and have all the information they need.
Blue Apron is also worth highlighting here. They offer live chat support, allowing subscribers to receive immediate assistance with their meal kits, whether it’s about ingredient substitutions, recipe clarifications, or delivery issues.
This real-time support ensures that customers won’t have issues preparing their meals and enhances their overall experience with the service.
Tracking Metrics: The Key to Successful Subscription Lifecycle Management
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Metrics are the cornerstone of effective subscription lifecycle management. They enable you to pinpoint where customers might face challenges in the cycle.
These insights enable you to address specific weak points, optimize each stage of the lifecycle, and ultimately create a smoother and more rewarding experience for your subscribers. Metrics don’t just highlight problems—they provide the roadmap for solutions.
Here are some of the most important customer lifecycle metrics to monitor:
📊 Customer Lifetime Value (CLV)
CLV represents the total revenue a subscriber is expected to generate during their time with your business. This metric helps you understand the long-term value of your customers, guiding decisions on how much to invest in acquisition and retention strategies.
How to calculate it: CLV = (Average revenue per user × average customer lifespan) − customer acquisition cost
📊 Churn Rate
This is the percentage of subscribers who cancel their subscriptions over a specific period. Monitoring churn gives you an overall understanding of how many customers leave your business. It may spur you to investigate underlying problems like poor engagement, unmet expectations, or pricing concerns.
How to calculate it: Churn rate = (Total subscribers at the start of period / number of cancellations during period) × 100
| Subbly experts recently created an in-depth report analyzing data from thousands of merchants in 2024, uncovering key insights into the many factors influencing subscription churn. Read the full report to understand the causes of churn better. |
📊 Renewal rate
This metric tracks how many subscribers renew their plans at the end of their billing cycles. A high renewal rate indicates strong customer satisfaction and loyalty, while a low rate suggests you may need to improve your product, communication, or incentives.
How to calculate it: Renewal rate = (Number of expiring subscriptions / number of renewals) × 100
📊 Monthly Recurring Revenue (MRR)
MRR is the predictable monthly revenue from active subscriptions. It provides a clear snapshot of your business’s financial health and helps you evaluate the impact of growth strategies, pricing changes, or customer behavior trends.
How to calculate it: MRR = Total active subscribers × average revenue per user (ARPU)
📊 Customer Acquisition Cost (CAC)
CAC measures how much you spend to acquire each new subscriber, including marketing and sales expenses. Comparing CAC with CLV helps you ensure your acquisition strategies are cost-effective and sustainable for long-term growth.
How to calculate it: CAC = Number of new subscribers acquired / total acquisition costs (e.g., ads, salaries)
Example of how to use metrics
For example, let’s say your customer retention is low. You analyze your lifecycle metrics and see that most customers fail to renew their subscription when it expires.
This could mean you are not doing enough to encourage customers to renew. Sending them several emails offering them discounts around renewal time could help.
However, it’s worth considering this in context with other metrics. For example, if customer satisfaction is low then it could be that people aren’t renewing because they feel your product is not worth the money, in which case you may need to improve it.
Streamline Subscription Lifecycle Management With Subbly
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Managing the entire customer journey—from acquisition to retention—can be overwhelming.
Subbly, a subscription-first commerce platform, offers a comprehensive suite of tools to streamline each customer journey stage.
✅ Onboarding made easy
Subbly helps businesses create a seamless onboarding experience by:
- Customizable Checkout: Subbly allows you to design a streamlined checkout process that suits your brand, offering flexibility and ease for new subscribers. This ensures that customers don’t face unnecessary friction right from the start.
- Automated Welcome Emails: Subbly’s email automation tools can be set up to send personalized welcome emails instantly after sign-up. These emails can outline what new subscribers can expect, provide tutorials, and even offer exclusive discounts to get them excited about their subscription.
- Flexible Subscription Options: Whether you offer one-time purchases or subscription tiers, Subbly gives you the flexibility to provide different plans tailored to customers’ needs, setting up the perfect conditions for long-term satisfaction.
✅ Engagement tools to retain subscribers
The journey doesn’t end with onboarding. Engaging your customers regularly is essential for keeping them happy and reducing churn. Subbly offers tools that help you stay connected with subscribers:
- Targeted email campaigns: You can segment your subscribers and send personalized emails based on their preferences, past purchases, or even their anniversary with your service.
- Loyalty programs: With Subbly’s integrations, you can easily create and manage loyalty programs that reward long-term subscribers with discounts, exclusive products, or early access to new items.
✅ Billing and payment flexibility
Subbly offers features like:
- Automated dunning: Subbly can automatically retry failed payments, and send reminders to update payment details, helping reduce involuntary churn.
- Transparent payment options: Flexible pricing plans and payment intervals, such as monthly, quarterly, or annual billing, can easily be set up to cater to various customer preferences.
✅ Insights with analytics
Subbly’s analytics tools allow businesses to track crucial metrics like churn rate, customer lifetime value (CLV), and engagement. By leveraging these insights, businesses can tweak their strategies to enhance customer satisfaction and grow revenue.
Start your free trial to learn how Subbly can help you improve customer retention and grow your business.
