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Insight of the Day: Subscription Business Leaders Are Prioritizing Retention Over Acquisition

Subscription Business Leaders Shift Focus to Customer Retention

According to the 2024 State of Subscriptions and Revenue Growth Report by Chargebee, subscription business leaders are prioritizing customer retention over acquisition.

Key Findings:

  • Retention Over Acquisition: 59% of respondents prioritize customer retention over acquisition.

  • Top Business Priority: 47% of respondents identify improving customer retention as their top priority for the year.

  • Key Performance Indicator (KPI): 47% aim to improve customer renewal or retention rate as their top KPI.

  • Churn Rates: 60% expect churn rates to increase this year, while 83% have a company-wide churn target.

  • Price Increases: 73% plan to increase prices this year, with one-quarter planning increases of over 20%.

  • Top Strategies: Expanding existing product features and investing in predictive analytics are top strategies for improvement.

  • Customer Success Initiatives: 42% plan to invest in customer success initiatives to improve net revenue retention.

  • Retention and Growth Strategy: Improving the quality and responsiveness of customer support is the top retention and growth strategy.

  • Retention Tactics: Introducing customer loyalty/membership programs and offering pauses/discounts/incentives are the leading retention tactics.

Overall, the report highlights a significant shift in focus from customer acquisition to retention in the subscription business landscape. This reflects the growing understanding that retaining existing customers is crucial for sustainable growth and profitability in the competitive subscription market.

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