New Data Points to a Shift in Business Priorities from Customer Acquisition to Customer Retention
Chargebee, the leading revenue growth management platform for subscription businesses, released its 2023 State of Subscription Industry Report revealing the dawn of a “Retention Era,” where retention is a top priority for 87% of businesses surveyed, on par with or surpassing new customer acquisition. The report also shows that 96% of subscription businesses believe customers cancel for reasons that could be managed or fixed. These insights reflect where executives are investing and winning this year.
Chargebee’s report showcases how businesses are adjusting to changing market conditions this year by shifting priorities and budgets to combat churn. Focus has moved from customer acquisition to revenue generation from existing customers, and for a good reason: churn is on the rise, with 64% expecting their churn to increase this year. To combat this loss of revenue, business leaders are changing investment priorities with:
- 51% investing in technology
- 32% investing in initiatives
- 27% investing in loyalty programs
Latest Fintech News: Inswitch and Banco Rendimento Join Forces to Enable Brazilians Worldwide to Make Payments with PIX
“This year has brought rapid change to the business landscape, with companies, no matter what business model they employ, finding ways to prioritize investment for continued growth,” said Guy Marion, Chief Marketing Officer at Chargebee. “Our data shows that a majority of B2B and DTC subscription businesses expect an increase in churn and therefore need a strong investment strategy to maintain and grow revenue. The smart bet is on retention, a more direct and efficient approach to long-term growth that places customers at the center of business.”
Respondents also report that their top concern for the year ahead is keeping up with rapidly changing technology and the profound impact of artificial intelligence (AI) on operations. Keeping pace will prove business-critical as companies seek to remain competitive amid rising consumer demand and technological advancements across all industries.
Latest Fintech News: Emplifi Partners With SKUx to Make Trackable Digital Customer Payments Possible on Emplifi Service Cloud
Key findings from the Chargebee 2023 State of Subscription Industry Report include:
- Over 96% of respondents believe that customer cancellations can be addressed and resolved.
- Customer retention is a top priority for 87% of businesses, on par with or surpassing customer acquisition.
- Investments to address churn are on the rise, with 51% investing in technology, 32% in initiatives, and 27% in loyalty programs.
- High revenue expectations are prevalent, with 79% of businesses anticipating growth this year.
- Price increases are anticipated, as 92% of subscription businesses expect prices to either rise or remain unchanged.
- Churn is on the rise, with 64% expecting an increase this year, while nearly 80% anticipate revenue growth.
- The primary concern is keeping pace with rapidly evolving market and technology trends.
- The foremost investment priority is technology and tools for customer acquisition and growth.
- The leading growth strategy involves enhancing the quality and responsiveness of customer success and support services.
Latest Fintech News: BAFS Announces an Industry-First Combination of Commercial Lending Software and Services
[To share your insights with us, please write to sghosh@martechseries.com]
