There are three primary subscription terms, trial, monthly, and annual subscription.
Which is best?
Trial subscriptions have the highest conversion rates because they are discounting the monthly subscription charge by 80-90 percent.
They have a higher churn rate than the others but usually result in more members after 12-months because of the superior front-end conversion rate.
Use it if you looking to scale quickly and are well financed to handle the cash flow challenges and/or you have choreographed upsells as part of your new subscriber onboarding to maximize cash flow after subscribers join.
Next, monthly subscriptions usually have 50% higher conversion rate than annual subscription offers.
And, even though monthly subscriptions have a lower retention rate, you will usually end up with more subscribers after 12-months as compared to annual, because of that higher conversion rate.
Finally, annual subscribers are your highest lifetime value subscribers. They retain well and buy other products and services you offer. The only challenge is there will be fewer of them because front-end conversion is not as high.
However, I love creating cash flow forecasts for my annual subscription clients because it’s easier to fund your customer acquisition costs when you get a full year of subscription revenue on the day the subscriber joins.
There are thousands of businesses that thrive only ever offering annual subscription terms.
Choose the subscription plan that balances your cash flow needs with your ambitions to scale recurring revenue. And, mix it up, testing different terms from time to time to appeal to unique segments within your target market.
📣Be Unleavable Coverage:
The Be Unleavable 7 email onboarding sequence to increase retention was featured as a Growth Gem by Mobile Growth Insights this week.
Under the heading, Lifecycle: welcome emails sequence, Sylvain Gauchet broke down the key retention period and the quick hack I’ve created that is cheap, fast to implement, and does a remarkably big improvement in retention rates.
📆 Where I’ve been:
My wife, Kory and I traveled to Milwaukee for the USA Triathlon Age Group National Championships.
It took me about 3 hours to complete the Olympic distance triathlon. About 40 minutes of swimming in 58-degree water, an hour and twenty to bike the 24-mile course and an hour to run 10 KM. Out of the 115 people in my age group I took 95th place!
You may wonder, “If Robert is slow, why was he at the National Championships?”
Great question. I qualified by winning my age group at a poorly attended triathlon in Savannah, Georgia. You can say I, “snuck in.”