The cost-of-living crisis saw many consumers tighten the purse strings out of necessity and reduce the number of monthly subscriptions they were paying out. However, consumer behaviour is changing as new research from Minna Technologies, FT Strategies, and global market research firm Savanta shows.
The subscription industry looks to be back on the rise with over half of all subscription businesses seeing an increase of 20% of subscribers.
To add to that, 60% of those customers that do choose to cancel their subscription return in 6 months. This trend happens most frequently when looking at content or streaming platforms where the subscribers make their way through the content available on the platform and then switch to a rival to do the same, returning when latest content is available.
Typically, Gen Z were the most likely to “churn and return”, but streaming services are seeing a high number of millennials joining the churn and return phenomenon as they battle balancing monthly payments.
The research also shows that consumers are now looking to pause their subscription service over cancelling. A huge 72% of subscribers would rather take the option to pause their payments in favour of cancelling, allowing them a ‘payment holiday’ from their subscription to cover other payments.
While the pause option is gaining traction, only 61% of subscription businesses offer payment pause options. 31% of those who do not offer the option to pause are looking to implement that option for their customers, but a lot of the time the delay may be due to the subscription business’ payment provider.
It’s vital that subscription businesses keep up with latest consumer behaviour and offer payment options that their subscribers want to see. This might mean that businesses will look for a payment provider that offers them the option to pause subscription services with no adverse impact to their business.
Our Access PaySuite Direct Debit solution allows you the option to change the amount of the Direct Debit, freeze Direct Debit collections or skip collections. This is done using patches.
This option allows you to offer payment holidays for your consumers and add those collections on to the end of the contract, extending the collection period. If your contracts are rolling contracts, the payment holiday will apply to the month(s) requested and will continue thereafter without the payments added on to the end of the contract. If this is the case, the option to skip payments might work better for you.
Allowing your subscribers to skip payments differs from freezing payments as these payments will not be added to the end of the contract. If your consumer has a twelve-month contract and skipped three payments, only nine payments will be collected, and the contract will end (or change if extended). The skipped payments will not be recovered or collected by the system.
You can choose either option with Access PaySuite, whilst still receiving clear and concise reporting ensuring accurate cashflow forecasting and no impact to your business.
If you're ready to elevate your payment experience and boost customer satisfaction, Access PaySuite is here to help. Contact us today to explore tailored solutions for your business.
