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Hidden Moats in Consumer Subscription
The Rule of Threes: The subscription economy from a consumer’s perspective
SparrowAdviserssparrowone.substack.com
The churn rate for companies employing usage-based billing is about 10 percent less on an annual basis: 26 percent for usage-based billers in comparison with 37 percent for non-usage-based billing companies. These lower churn rates reflect higher customer satisfaction and engagement with companies that fulfill the central tenet of the Subscription
... See moreTien Tzuo • Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It
Borrowing from the retail sector, they score every one of their readers on the multiple of three factors: recency (when did they last visit?), frequency (how often do they visit?), and volume (how many articles have they read?). Low scores indicate churn risks that their promotions group can approach with discount offers.
Tien Tzuo • Subscribed: Why the Subscription Model Will Be Your Company's Future - and What to Do About It
Yet another source of profit pressure will be much higher churn, due to much lower consumer switching costs.