Subscription Business
SaaS ProvidersSubscription Service Providers

5 ways to optimize your subscription business for maximum growth

7 Mins read

Amidst rapid digitalization and transformation, businesses are continuously evolving their business models to meet the demands of the audience while staying ahead of the competition. A subscription-based business model, also known as the recurring revenue model, has proven beneficial for both businesses and customers. Almost every company is now offering some sort of subscription to generate a recurring mode of revenue. The growth in consumer demand is set to fuel the subscription economy’s expansion to $1.5 trillion by 2025.

If you’re already in the subscription business or are planning to enter soon, there couldn’t be a better time.

However, what’s more challenging than building a subscription business, is building a successful one. The world of subscriptions is constantly evolving with new competition entering at a faster pace. If you’re not able to optimize your subscription business, you’ll be at risk of being left behind.

In this blog, we’ll be discussing several strategies you can use to optimize your subscription business for maximum growth. From offering a variety of subscription plans to focusing on customer retention and investing in marketing and advertising, we’ll cover all the key areas you need to consider taking your business to the next level.

How to grow your subscription business? – 5 steps

1. Focus on offering a variety of subscription plans

Subscription businesses must focus on offering multiple options for customers to choose from when signing up for a service. This may include different pricing tiers, the type and quantity of products included, frequency of delivery, etc. For example, music streaming service provider – Spotify, offers several plans to users. From basic individual plans to high-priced group or family plans, to allow users to choose the one that fits their budget and needs.

Subscription Business

Source: Spotify

Offering different subscription plans allows businesses to appeal to a wider range of customers which can lead to increased revenue. It also gives flexibility to the customers in terms of how they want to use the service.

While you offer multiple subscription plans and products, do not forget to optimize your subscription catalog. Ensure that the customers can add multiple subscriptions to a single purchase. You can also consider providing subscription gifting options wherever applicable.

2. Upsell and cross-sell

One of the key strategies for growing your subscription business is to upsell and cross-sell. If you are new to subscription businesses, let us help you understand the terms.

What is up-selling?

Up-selling refers to the practice of encouraging customers to upgrade to a higher-priced subscription plan. This may include suggesting premium plans of a product or service to a user who is currently subscribed to a basic plan with limited features.

If you’ve ever bought something from Amazon shopping, you must be familiar with the following selling tactics:

  • “Customers who bought this also bought this.”
  • “Relevant products”
  • “Frequently brought together”

These are some of the upselling tactics used by e-commerce subscription economy giants. You can explore more and try to include these in your selling strategy as well.

How to upsell to existing customers?

Your existing customers are your biggest assets. To upsell to them, you can use the following strategies:

  • Identify opportunities to upsell. For example, if a customer frequently purchases additional products outside of their subscription, they might be a good candidate for an upgraded subscription plan.
  • Don’t just recommend an upgrade, communicate the value of that upgrade. Make sure to clearly tell the customer how the higher plan is better. You can do this by highlighting any additional features or price benefits they might achieve by upgrading.
  • Offer perks for upgrading the plan. Some of the best perks could be discounts and promo codes. Encourage customers to upgrade to a higher-priced plan to get a unique discount code.

While you offer customers the option to upgrade, also focus on making the upgrade process easier. They should be able to self-upgrade with simple clicks. This will reduce any barriers or hesitation to upgrade.

What is cross-selling?

Cross-selling refers to the practice of offering complementary products or services to subscribers. For example, if a customer is subscribed to a monthly box of organic produce, the business might cross-sell them on a subscription to a meal delivery service that uses the produce from their box in the recipes.

A more basic example would be to offer a phone case to a customer who has recently bought a smartphone.

The goal here is to increase the average order value and revenue per customer.

How to cross-sell to existing customers?

To cross-sell to existing customers, try the below-given strategies:

  • Identify cross-selling opportunities. Look for products or services that complement your main offering and would be of interest to your subscribers.
  • Highlight the value of the cross-sell.
  • Create bundles and personalize the cross-sell.
  • Offer discounts and promotions on additional products or subscriptions.

3. Focus on customer acquisition and retention

To grow your subscription business, you should focus on acquiring new customers and retaining existing ones. We will discuss both strategies to help you understand how they differ.

Let’s first talk about the acquisition of new customers. No business can survive without new customers. Most of the marketing campaigns and strategies are focused on bringing brand awareness and getting new leads. Let’s see how you can attract new customers to your subscription business.

How can you attract new customers to your subscription business?

  • Work on improving your brand’s presence in the market. This will include making investments in marketing and advertising strategies like paid advertising, social media marketing, content marketing, and more.
  • Focus on improving your customer satisfaction rate. Word-of-mouth marketing is the key to acquiring new customers and spreading your brand’s awareness.
  • Try to keep the entry plan low so more and more people can subscribe to your service. You can later improve the marketing efforts to try and upsell to these subscribers.
  • Try offering free trials and money-back guarantees to increase the likelihood of new customers signing up for your service. Check this example below from an American online retailer of pet food and other pet-related products:

Subscription Billing

Source: Chewy

  • Use social media to engage with potential customers and showcase the value of your subscription service.
  • Optimize your website for conversions. Make sure your website is easy to use and optimized for conversions. This can include having clear calls to action, prominent subscription buttons, and compelling product descriptions. Consider a marketplace solution or cloud marketplace for easy setup and management.

You can also partner with complementary businesses to cross-promote each other’s products or services. This can be a good way to reach a new audience and acquire more customers.

Now, let’s focus on the importance of retaining existing customers. For any subscription business, the existing customers are the biggest asset.

The reason is – you can upsell and cross-sell to your existing customers to increase the sales and value of each subscription and increase the annual recurring revenue (ARR). New customers should be added, but you must focus on keeping the acquisition cost low.

Benefits of retaining the existing customers

  • It’s often less expensive to retain existing customers than it is to acquire new ones. By focusing on customer retention, businesses can save on the costs associated with acquiring new customers, such as marketing and advertising expenses.
  • Retaining customers can also lead to increased revenue, as loyal customers are more likely to purchase additional products or services or upgrade to higher-priced subscription plans.
  • Customer retention can also improve the overall lifetime value of a customer, as loyal customers are likely to remain subscribed to the service for longer periods of time.
  • Providing excellent customer service and retaining customers can also enhance a business’s reputation and attract new customers through word-of-mouth marketing.
  • A high customer retention rate can also give businesses a competitive advantage over competitors, as customers are less likely to switch to another service if they are satisfied with the one, they are currently using.

Suggested Reading: How to attract and retain customers in the subscription business

4. Use data to make informed decisions

For any successful business, data is the lifeblood. Data and reports can help you identify your customers’ buying trends and other behaviors. This will help you make informed product and pricing decisions and identify areas for improvement.

By analyzing the purchase pattern of your subscribers or their interest, you can create successful upsell and cross-sell strategies to meet their needs better.


You can also use data to segment your customer base to send personalized marketing communications.

It will help you monitor the performance of your subscription business and track your progress over time. Data and reporting help you move from intuitive-decision making to data-driven decision-making.

5. Invest in a subscription business management software

When you are trying to optimize your subscription business – you should not forget that the foundation of a successful business is operational excellence.

The subscription business is about speed, growth, and scalability. If you do not have the technology to support these goals – you might fall behind in no time. To manage the operations of a subscription business, especially recurring billing and invoicing, you must consider investing in subscription business management software.

Benefits of a subscription business management software:

  • It can help you improve efficiency by streamlining and automating key processes, such as billing, payment processing, and customer communication. This can save time and reduce the risk of errors, leading to improved efficiency.
  • It can help you provide a better customer experience by enabling personalized communication and offering self-service options for things like account management and plan changes.
  • It can help you increase revenue through improved upselling and cross-selling efforts, as well as by reducing churn and increasing customer retention.
  • It can provide your business with valuable data and insights into your customers, which can inform product and pricing decisions and help drive growth.
  • It can help you scale your subscription business easily by providing tools to manage many subscribers and subscriptions efficiently.

Growing your subscription business – focus on continuous improvement

By continuously improving and iterating, you can stay up to date on industry trends and customer needs, which can help you remain relevant in a rapidly changing market. It can also help you remain attractive to potential subscribers and stand out in the market. It can further lead to increased customer satisfaction as customers will appreciate the efforts the business is making to improve the service.

At RackNap, we can help simplify subscription management for you with the help of automation. To know more about how our software works, book a demo.

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