Retention Over Acquisition: The New Subscription Paradigm

Customerland

The subscription economy is experiencing a profound transformation. What once centered entirely on acquisition has shifted dramatically toward retention as businesses recognize the true value of deepening customer relationships rather than constantly chasing new subscribers.
Lina Tonk, CMO at Recurly, explains this evolution with remarkable clarity: "When you start thinking about retention as a top metric instead of acquisition, you realize that you're getting close to the human that you're serving and the value that you're providing them." This perspective shift represents what she calls "a beautiful moment" in the subscription market—one that reconnects businesses with their fundamental purpose of serving people.
Data reveals the urgency behind this transformation. Acquisition rates have plummeted from 4% to 2.8%, forcing subscription businesses to rethink their growth strategies. The most successful companies now view this challenge as an opportunity to create what Tonk describes as "magical moments" with existing customers—personalized experiences that strengthen bonds and drive loyalty.
The conversation delves into practical approaches for building customer proximity. At Recurly, this starts at the executive level, with leadership actively participating in customer meetings and seeking direct feedback. Their executive program connects C-suite leaders with customers quarterly, not just for business reviews but to share insights from subscriber behavior data that can guide strategic decisions. This approach acknowledges that "customer experience is everybody's job," not just the responsibility of customer success managers.
Perhaps most fascinating is the evolving view of cancellations and pauses. "Cancellation isn't goodbye," Tonk emphasizes, noting that approximately 70% of subscribers would remain if offered a loyalty incentive. The option to pause subscriptions—whether for a month, three months, or longer—has become a powerful retention tool, creating pathways for customers to return on their own terms.
Want to build stronger subscriber relationships and drive sustainable growth? Listen now to discover how getting truly close to your customers can transform your subscription business. And stay tuned for future conversations exploring the intersection of customer experience, loyalty, and retention in greater depth.

Chapters

1. Retention vs Acquisition in Subscriptions (00:00:00)

2. Recurly's Growth Through Customer Proximity (00:05:32)

3. Executive Programs and Customer Connections (00:09:11)

4. Loyalty Programs: Now a Must-Have (00:17:58)

5. Pause and Cancellation: Opportunities Not Endings (00:25:50)

6. Future Conversations on Customer Experience (00:29:23)