Carrier Billing Subscriptions 101: pt 3 – Increase User Retention

Filip Simceski

Head of Connectivity Operations, Centili

After providing some hints and tips on revenue optimisation in our previous blog, in this blog post we’re going to look at how to make the most of the subscriber retention. Your subscribers are what keeps your business going, which is why a happy user is… well, still a user.

 

Empower users by keeping them in the loop

Making sure to transparently inform users about every step of the carrier billing payment process is a key step in ensuring their longevity. This way, a merchant can easily earn users trust even before they become fully-engaged with the service.

A good thing to start with are informational SMS messages, which give the customers immediate insight into all the activities related to their payment process. In most cases, a user would receive several messages such as:

  • Subscription activation message
  • Renewal message
  • Reminder message
  • Subscription deactivation message


All of them are equally important for the end user as well as for merchants and mobile operators . Regarding the last two points, it’s always good practice to have a partner that is experienced with direct carrier billing and A2P messaging in different markets, with different user segments and service types.

This allows merchants to manage content, send targeted messages depending on the subscription phase of each user globally and customize the experience to fit each brand, respectively. Managing all these touchpoints, navigating through local regulations and operator connectivity for each market segments is something that needs to be done in a professional way keeping users satisfaction in the focus.

Quality SMS management can decrease churn rate significantly. In our experience, a customised activation message decreased the churn rate by 50% .

 

The difference between customised and generic subscription activation messages: 

  

Send the right message

When it comes to the content of messages you’re sending out, one of the most important things is language. A message written in a user’s local language puts him at ease when choosing to subscribe.

Next, comes timing. The first 48 hours are crucial in setting up your user’s lifetime value. This is the time to communicate all important information and thank them for subscribing. Similarly, the final 24 hours of a subscription period are critical for renewal so make sure you don’t drop the ball. Our experience has shown that most customers who are not on auto-renewal will renew their subscription inside the last 24 hours, and to make sure that happens, reminder message should be sent.

 

Users want to try before they buy, give them the option

Just think about it. Any product, any industry. Be it the new Air Jordans or a vacuum cleaner, you want to take it for a test run, so do users.

Indeed, some very successful subscription models begin by offering users free trial periods or with a freemium option. This way, users are given a chance to see the value behind the service and it is an opportunity for users to get hooked into becoming a long-term user or paid subscriber.

The reason for offering free trial period or partial access for free can be found in human habit and basic psychology. People want to try or test things they are buying, same is applicable to content consumption or online services they are subscribing to. Take the Headspace app as an example.

Headspace is a meditation app made simple. When you initially download the app and create an account the service offers you a 10-day mediation trial. This is plenty of time to a) see how slick and easy it is to mediate with the app, b) create a routine of morning meditation tied to the app and c) see the value behind it. After this 10-day trial period, you have a pretty accurate idea of how the app helps increase your mindfulness and impact your health, which is why you subscribe for additional content. Transparent, helpful and easy, isn’t it?

Netflix also has a similar subscription model. This content provider offers a free trial month and automatic subscription is activated after the trial period is over. Users are of course informed about activation of paid subscription. Since the subscription is automated, most users continue with using software. Also, after a month of the free subscription period, most of the users don’t want to lose the availability of the content they are used to by now.

Offering trial period or using freemium model is also a chance to get closer to users. Once they give the information required for activation of the trial period, an online merchant can communicate benefits and value of the service through email or SMS marketing. Ideally, in monthly subscriptions, users should be reminded about the service and motivated to pay for further subscription at least 7 days, 48 hours and 24 hours before paid subscription is activated.

 

Upselling opportunity that adds value for user

In subscription business models discounts can boost user lifetime value and upsell opportunities and move the user up the value chain. However, you should have a clear strategy when offering discounts, because too many discounts can devalue a service, both from a financial and branding standpoint.

If the subscription pricing is based on service upgrades, users can be offered discounts by creating tiers for service levels. That way, with each service upgrade users get some added value. The second model can entail incentives for longer period subscriptions. That way, the price for the longer subscription period is significantly lower than the cumulative price of daily or monthly subscriptions. So, let’s say that a monthly subscription costs 20€, subscription for three months would cost 50€, the 6-month subscription would be 90€ and yearly 170€. This way, users are given the valid reason to subscribe for longer period and value of the service is not degraded.


Transparency, trial period, free content, and smart discount strategy results in a higher satisfaction level of users and leads to higher retention rates.

 

 

Read all blog posts from "Carrier Billing Subscriptions 101" series: 

Carrier Billing Subscriptions 101: pt 1 – Improve Conversion Rates

Carrier Billing Subscriptions 101: pt 2 – Optimise Revenue

Carrier Billing Subscriptions 101: pt 4 – Monitor, Investigate, React

 

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