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Mathieu Verbeeck
1. FROM FRONT PORCH TO EXIT POLL
HOW TO BUILD AN ENGAGING & SUCCESSFUL SUBSCRIPTION SERVICE FOR YOUR BUSINESS
Product World Forum SF - 2019
Mathieu Verbeeck
3. 15 years of product experience at start-ups and large companies
• Media & Entertainment
• Subscription-based offerings
• Focus on delivering ongoing, tangible and meaningful value
30 Seconds Intro
4. Business is no longer linear and product-based
It’s nimble, customer-centric and service-based
Its fuel is subscribers
Tien Tzuo, CEO of Zuora
Opening Quote
5. RECURRING REVENUE
delivered through subscriptions provide reliable,
smooth & predictable revenue streams which fuels
sustainable growth
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Transaction-based
Revenue
Subscription-based
Revenue
FOR YOUR BUSINESSFOR YOUR CUSTOMER
PEOPLE VALUE SERVICES MORE THAN
PHYSICAL PRODUCTS
People are less interested in owning products; what
the really want is to be able use them
Why Subscription Models matter
7. Build a valued/valuable membership offering
(as opposed to a utility subscription)
GREATNESS BELONGING CONTINUITY GRATITUDE+ + +
Providing your members with
the most unique and exciting
experience
Providing your members with a
sense of affiliation & belonging
to your community
Providing your members with
tangible & meaningful value and
benefits, 365 days a year
Providing continuous
appreciation and reward your
most loyal members
↑ Engagement
↑ Satisfaction
↑ Participation
↑ Network Effect
↑ Retention
↑ Tenure
↑ Loyalty
↑ Advocacy
Primary reasons to JOIN as a member Primary reasons to REMAIN as a member
8. The value you offer
should be ongoing,
tangible and meaningful
14. Sustainable Value
F(value) = [ Functional + Emotional ] x [ Aspirational ]
Think about this as your ANCHOR VALUE
Think about this as your MULTIPLIER
16. SUBSCRIBER NON-SUBSCRIBER
IN TRIAL PAID
UP FOR RENEWAL
PAID
NOT UP FOR RENEWAL
PAUSED (MULTI-)LAPSED NEVER
Focus on Engagement & Retention Focus on Re-engagement & Re-activation Focus on Reclamation & Acquisition
Improve your product experience and communication through better targeting & personalization.
You can do this by creating more granular subscriber states
17. Subscriber State
Current/Last SKU
Trial Eligibility
Up for Renewal
(next 30 days)
Auto-Renewal
Validity of Payment
Propensity Score
(linked to subscriber state)
Active Lapsed Never
None 1M 12M
Yes No
Yes No
Yes No
Yes No
Low Medium High
Trial
Key Attributes to Track
18. Subscriber State
Current/Last SKU
Trial Eligibility
Up for Renewal
(next 30 days)
Auto-Renewal
Validity of Payment
Active Lapsed Never
None 1M 12M
Yes No
Yes No
Yes No
Yes No
Trial
Propensity Score
(linked to subscriber state)
Low Medium High
Example 1: RETAIN
This means a high
propensity to renew
19. Subscriber State
Current/Last SKU
Trial Eligibility
Up for Renewal
(next 30 days)
Auto-Renewal
Validity of Payment
Active Lapsed Never
None 1M 12M
Yes No
Yes No
Yes No
Yes No
Trial
Propensity Score
(linked to subscriber state)
Low Medium High
This means a medium
propensity to acquire
Example 2: ACQUIRE
20. Subscriber State
Current/Last SKU
Trial Eligibility
Up for Renewal
(next 30 days)
Auto-Renewal
Validity of Payment
Active Lapsed Never
None 1M 12M
Yes No
Yes No
Yes No
Yes No
Trial
Propensity Score
(linked to subscriber state)
Low Medium High
This means a medium
propensity to reclaim
Example 3: RECLAIM
23. OPTIMIZING FOR REVENUE
OPTIMIZING FOR TENUREOPTIMIZING FOR RETENTION
↑ monthly plan
(requires confidence in renewal intent)
↑ yearly plan
(requires discounting)
↑ engagement with multiple benefits
(requires ongoing investments)
For each segment, think about what you’re optimizing for!
24. Subscribers who engage with your PRIMARY benefit (I)
Subscribers who engage with your SECONDARY benefit (II)
Subscribers who engage with your TERTIARY benefit (III)
Subscribers who are INACTIVE (dormant) (X)
Segment Size Retention % Annual plan
I XL ~75% ~50%
I + II L ~75% ~65%
I + II + III M ~90% ~70%
I +III S ~85% ~50%
II S ~70% ~60%
II + III S ~80% ~70%
III XS ~75% ~40%
X M ~60% ~50%
Example is based on dual SKU offering
1 month plan (non-discounted)
12 months plan (discounted)
Investing in multiple benefits drives retention
26. Trial versus Front Porch
Front Porch Trial
No commitment Commitment
Limited experience Full experience
Long engagement time Short engagement time
A front porch
• is constructed as a sampler / taster / teaser
• is limited in scope, but highly enjoyable as an experience
• is instantly accessible and requires zero commitment or sign-up
• is freely accessible all the time
• is build as an experience that highlights the main benefits of your experience
27.
28.
29.
30. Trial versus Front Porch
Adding a Front Porch experience
to the mix of acquisition
channels creates multiple tracks
to subscription activation
Front Porch Principle:
Do > Show > Explain
Having to EXPLAIN what your service is about is the least
effective way to engage with your new users
You could SHOW how to use/enjoy some of the benefits, but
ideally you would want to have users DO things proactively
without any friction
Once you get them excited / interested, they will engage more
deeply and take the time to learn more about your service
offering
Front Porch
Front Porch Trial
Trial
Subscribe
Subscribe
Subscribe
36. Deferring by highlighting
key benefits, content
and/or available
promotions
Deferring by pausing the
subscription
Introduce Exit Poll
Optimize your Exit Path
38. Success Ingredients
1
Service-Market Fit
Subscribers need to LOVE your service and will want to continue paying you forever
Focus on the right metrics
Instead of traditional acquisition and sales metrics, you should focus on subscriber engagement & retention
Build a ‘Membership' Culture
A subscription is a pricing structure, whereas a membership is a mindset
2
3
39. Success is measured through tenure and loyalty
How long a subscriber stays is more critical than how many walk through the front door
Continuous investment required into the service offering
Product innovation should be continuous, fast and announced with incremental updates & improvements
A different kind of business model
It's not about selling discrete products - it’s about longevity and sustainability
Implications
1
2
3
40. Proliferation of many (niche) subscription services
All competing for consumer time/attention/wallet
Subscription fatigue
Requires service providers to look into new ways to monetize and distribute their shrives (e.g. bundling/tiering)
“All-you-can-eat" business models tend to be inefficient
Trend towards curation (↑ perceived value + ↓ paradox of choice) & exclusive content/benefits
Challenges
1
2
3
