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Subscription Management: 5 Key Strategies to Consider

Subscription Management: 5 Key Strategies to Consider

Subscription Management: 5 Key Strategies to Consider
Markus Hedjenberg
Head of Product Management
INSIGHTS BLOG /
 July 2021

Subscription management refers to customer lifecycle operations, from the initial trials, vouchers, subscription packages, billing, and customer service. While some customers choose to build custom tools with teams already in place to manage this as a part of their service, others outsource functions for the entire operation. When choosing vendors, you need to dig into the details of each part of the user journey and make sure your vendors have the tools available for your service to present a flawless experience. It should all be about ease of use. One small mistake in a registration flow or managing a subscription could  lead to churn.

To enable a great user experience, vendors need to have flexibility alongside well-thought-out processes in the underlying systems. One prominent example of this is changing tier from one package to another. So many subscription management suppliers still get this wrong and do not offer the required flexibility.

There is no one-size-fits-all approach when it comes to building and managing a subscription platform. So how do you decide which route to take? To suitably harness a more complex commercial structure, you need to continuously analyze the service to understand what levers to pull to adjust to your different models. Here, we explore 5 key strategies to consider when managing your subscription platform:

Content

Content is king, but there is space in the market for a wide range of different types of content. The type of content you provide will influence the best subscription model for your customers. Begin by asking yourself a few simple questions: What would a prospective customer pay for a particular service, compared to the wide range of services offered by the global companies such as Netflix et al. ? Should we bundle our content differently, e.g. all you can eat package vs multiple tiers? Which features and/or content could potentially  differentiate pricing?

Features

What features should differentiate the packages from each other? There are two aspects to this: end-user value perception and internal cost drivers. End users tend to value convenience and flexibility. Comfort is by far the most valuable in any business. Humans always strive to make life as easy as possible; this is how we’re programmed.

For example, the number of simultaneous users has successfully been used by Netflix to differentiate its packages.

The top-tier services have set the bar high for the rest out there, but do you need to do what they do? Can you offer an initial package with minor features that drive customers to a more limited service at a lower price, i.e. attracting users and upselling features and functions? Often some of the more advanced features are nice to have but don’t impact those initial subscribers signing up.

Pricing and Plans

Many video service providers have grand plans for their commercial setup and request complex models, so complex that it quickly gets confusing for end-users and the internal team to create easy to understand marketing messaging. Please don’t get blindsided by all the options. Just because something is technically doable it doesn’t mean you should do it. Keeping customer communication and subscriber options simple is key to success.

Look at the current most successful global service, Netflix, which delivers very little complexity and plenty of clarity around what users get. The benefit of this model is that you also have a clear upselling path. They include everything in each tier and then upsell you as you use the service more and more – such as the number of screens or devices you can at the same time. 

It is all about the content you have and the type of audience you are attracting. Does your catalog appeal to a broader audience in a family scenario? Then streaming concurrently is probably an interesting upsell you can use. If you have a niche service with stunning imagery, then video quality might be the choice instead.

Keep it simple to start with—one or two tiers with different layers of access.

Value Creation

There is a delicate balance here, and you need to know what your customers value in terms of content and functionality. To find this, you need to do a market study and create a value matrix of content and features.

Start by identifying your core audience and ask them to map out the various parts of your offering in the below matrix. Things that end up in the upper right box are things customers would be willing to pay extra for, and from there, you can map out a pricing strategy.

 *willingness to pay

Please find an example below. Think of the use cases that fit your service best and include them in a similar exercise.

Be explicit about what content you think is valuable so users can help you make the distinction. If you own the national basketball rights in your country, then include that explicitly.

Live

  • Basketball series
  • PGA tour
  • Concerts
  • BBC world 24/7 live channel
  • Exclusive programs

VOD

  • Movies
  • Clips
  • Series
  •  

Number of screens you can watch at the same time

  • 1
  • 2
  • 4
  • 8

Number of devices available for Offline content

  • 1
  • 2
  • 4
  • 8

Streaming hours per month

  • 10
  • 50
  • 100
  • 500

HD

  • HD
  • UHD

Personal profiles

  • Kid’s mode

 

Geographic Positioning

Are you targeting the right geographical region with your service? Are you looking to attract a more global audience or more regionally focused? What is the willingness to pay for your specific catalog, and the features you provide? There may be a huge appetite if your content is unique or extremely regionally relevant. Depending on where your audience is located, you may need to ensure that there are options to change language settings.

No matter which subscription management model you choose, Accedo One can help you build and grow an impactful video service. You can get your video service to market fast and expand your service by integrating new features based on what your customers want and need.

To learn more about our powerful SaaS video platform, visit https://www.accedo.tv/one/

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