Subscription-based business models are becoming increasingly popular around the world. What's more, it's happening in a variety of businesses.
Aside from AVOD and TVOD, the VOD subscription market has been thriving, with SVOD being the most popular format.
The subscription-based method is quite popular among customers. However, customers frequently prefer monthly payments over annual plans, which could be one of the reasons for your company's slow growth.
Offering Annual Video Subscriptions Has Its Advantages
Let's start with a little warm-up by looking at the subscription fee for The House of Yoga.
There are three payment options: monthly, annual, and bi-annual.
The advantage of an annual membership is obvious: the buyer will save up to 40% per year.
This annual savings is a fantastic way to entice new consumers. Furthermore, the page design encourages customers to choose this plan by attracting their attention visually (the biggest box, red CTA button).
If paying for a full year in advance is not an option, there is also a half-year option. If people save money by picking you and you have a superior product to your competitors, that's a win-win situation.
Customer Retention is aided through annual subscriptions
At first glance, the most critical issue appears to be continual business expansion and sustained consumer base growth.
But:
It's equally as crucial to keep your current consumers. In fact, gaining new clients might cost up to five times more.
Annual subscribers, unlike monthly subscribers, have a whole year to integrate the service into their daily lives.
They develop accustomed to it, become active users, delve deeply into various features or content pieces, and feel connected as a result. When compared to individuals who have monthly memberships, the anxiety of missing out is substantially greater.
Improved Cash Flow
Monthly settlements ensure a steady flow of funds for businesses.
In the event of stagnation, this could be a viable option. But what if you want your company to expand?
You simply need more cash in less time to be able to grow your firm gradually and have resources to invest in customer acquisition.
As a result, despite the lower amount of money per user in the annual computation, annual plans paid in advance are by far the better option in terms of growth.
Having more money allows you to spend on more marketing efforts and attract a larger number of new subscribers, who will then bring you more money to keep this lead generating machine running.
- Attracting New Customers
Let's look at some strategies for persuading potential clients to assume the risk of signing up for a 12-month subscription.
Highlight the highlights of your annual plan.
Isn't it rather straightforward? One of the fast modifications you can do is to describe the advantages that the customer will receive if they opt for the annual service.
You can market your annual membership using social media and partner sites in addition to including thorough information in the plan description on your website.
Use icons, photos, or a gorgeous branded brochure to make the articles visually engaging.
Make A Free Trial Available
For clients who are undecided, a free trial option is quite valuable.
If your yearly plan gives customers unique access to content and services that aren't available to monthly users, this is a wonderful opportunity for them to try out the full version.
Flicknexs offers a seven-day free trial.
Consider providing refunds
When creating a subscription plan, keep in mind that consumers may want (or need) to cancel at any time.
It could be worthwhile to consider creating refunds that are proportional to the amount of time the user spent using the service.
Your potential leads will feel more safe and keen to join up for a longer period as a result of this option. Moreover, despite the prospect of theoretical paybacks, you will have stronger cash flow than with monthly payments.
Including Attractive Gifts
Offering something extra to someone who chooses a yearlong plan is always a smart idea.
These can be unique training materials, discounts for extra services, free webinars, or dedicated VIP meetings, depending on the content given by your SVOD company.
It will help you develop relationships with customers and contribute to a lower churn rate, aside from the user's confidence that a prepaid annual membership is valuable.
- Converting Monthly Subscribers to Annual Subscriptions
After discussing some strategies for increasing the percentage of prospective subscribers who sign up for an annual (or other non-monthly) plan, it's time to consider how to approach your current monthly subscribers and persuade them to upgrade.
When Should You Approach Your Users?
You must ensure that monthly subscribers are actively using your services if you want them to upgrade to an annual plan. Any attempts to upsell should not be done too soon!
Choose the Most Effective Communication Channel
Phone conversations, text messages, and e-mails can all be effective, but you should pick your tools carefully and allow your consumers to select how they want to communicate with you.
If your subscribers have provided you with their phone numbers and you have a history of interaction with them, you can try calling them on the phone. In most circumstances, or if the relationship is less personal, email or SMS outreach would be a better place to start.
Content That Is Both Informative And Encouraging
I strongly advise you to devote some time to crafting and perfecting your outreach messages.
The material should include information regarding the advantages of upgrading to a yearly subscription for the customer. It's also a good idea to offer a brief overview of the switching process:
what they must do to prove their willingness to switch (for example click the CTA button or reply to a message)
what they will be charged and when they will be invoiced, and what they should do if they want to stay on a monthly plan (for example ignore the message)
To Sum it Up:
One of the most effective ways to promote your company's growth is to increase the number of clients on annual plans.
It not only provides major corporate benefits, such as increased cash flow and client retention, but it also provides significant benefits to subscribers.
The following are the main strategies for persuading new users to sign up for annual plans:
- highlighting the advantages of an annual plan
- giving a free trial and showcasing annual savings over a monthly plan
- Including incentives or gifts
Current monthly members can be persuaded to upgrade to an annual plan by:
- reaching them at the correct moment,
- using their preferred communication channel, and
- giving an educational message with a clear opt-out option
Last but not least, providing the greatest level of service quality to all clients, whether they are on monthly, quarterly, or annual plans, is a vital part of growing a successful SVOD business.
After all, highly satisfied monthly members may not require much in the way of persuasion to upgrade.