The subscription economy is thriving, but companies are losing billions when people hit the cancel button — a company called Brightback wants to change that by creating automated software designed to keep customers from leaving.
”If we look at today’s economy and the rises of the subscription economy — we’ve seen companies grow massively. In the last 10 years we’ve had a favorable funding environment, we’ve had cheap infrastructure that itself was subscription business. Now as a result we’ve seen the average consumer subscribe to two or three subscriptions today whether its Shopify, Netflix, Hulu, Dropbox, Google Apps,” Brightback CEO and Founder Guy Marion told Yahoo Finance’s YFi AM this week.
Americans spend over $2 billion a month on subscription streaming services, according to a Deloitte survey from March 2018. But Marion noted, “One thing about consumers, we tend to be pretty fickle, as easy as we can sign up for a service, we can also leave a service. In fact, in research we did earlier this year we found that 97% of our surveyed subscription companies said that retention is there number one priority now.”
Brightback convinces customers to stay by identifying problems that people have and personalizing the experience. “If someone hits cancel we take them to a page where we can remind them of why they first came there to begin with and provide offers that are really relevant for that particular issue,” Marion says. “We create a personalized experience, so if someone hits cancel we take them to a page where we can remind them of why they first came there to begin with and provide offers that are really relevant for that particular issue.”
The subscription business has done really well with some recent IPO’s. “Datadog [DDOG] and Zoom [ZM], Pager Duty [PD]. These subscription business have really great retention metrics. And what we’re not seeing with them is the same thing that we’re seeing with WeWork and Uber [UBER] right now which is that these companies have just been growing at all cost, and are funded through pure acquisition related growth without necessarily having sustainable underlying business model.”
Read the article and see the interview on Yahoo! Finance.