Dive Brief:
- Customers who subscribe to a brand’s products or services want more flexibility and value for their subscriptions, according to a report released Wednesday by Recurly. The subscription management software and recurring billing platform analyzed over 2,200 merchants and 76 million unique subscribers over a 12-month period for the report.
- Transparent billing with no hidden fees, exclusive content and features, excellent customer service, and flexible commitment were the factors that motivated customer loyalty the most.
- Flexibility has become critical for retention. Companies that offer the ability to pause instead of canceling saw pause usage more than quadruple, according to Recurly. Three-quarters of those subscribers returned within months.
Dive Insight:
Though a federal court blocked the Federal Trade Commission’s “click-to-cancel” rule from taking effect, its ethos lives on.
Customers have long complained about the onerous process of canceling a subscription that was easy to sign up for. The FTC, for example, received nearly 70 consumer complaints per day on average in 2024. Its rule would have prohibited businesses from misrepresenting subscription terms and required brands to provide a simple method to halt recurring charges.
Despite the rule’s demise, customers are showing affinity for brands that make pausing or canceling subscriptions easier.
More than one-third of consumers — 38% — prefer pausing over canceling, “proof that control and choice keep subscribers loyal,” Recurly found.
A Chargebee survey from September came to similar findings. Nearly 3 in 5 consumers said they have paused a subscription instead of canceling.
“To get loyalty right, brands must move beyond traditional ‘lock-in’ tactics and instead offer high-choice options like ‘pause before cancel,’" Sarah McCredie, VP of product marketing at Recurly, told CX Dive via email.
Value and flexibility are also key to courting customers. Nearly 9 in 10 consumers say value for money is the most important factor when choosing a subscription, while 7 in 10 prioritize the ability to cancel easily.
Chargebee’s survey also found such an affinity for easy cancellation policies. More than 4 in 5 customers say they are more likely to subscribe if they know cancellation is easy.
As consumers worry about a recession, they continue to seek value and are beginning to shed services, Gartner VP analyst Kate Muhl told CX Dive. That includes subscriptions they’re not getting enough out of.
The top two reasons consumers canceled a subscription were not using it enough and the price being too high. Engaged subscribers are more likely to keep a subscription.
“True loyalty is built by using data to identify disengagement early and intervening with micro-subscriptions or short-term passes that meet the user where they are rather than a one-size-fits-all approach,” McCredie said.
