In the past decade, the subscription economy has grown by more than 437%. Today, four in every 5 adults globally now subscribe to a service of some kind, with the majority of this growth being prompted by the pandemic. The move from ownership to usership has changed the way consumers interact with businesses, with subscription services primarily being marked by their convenience, flexibility, and the anticipation and excitement they nurture in customers.

Take The Cocktail Society, a start-up that boomed during the pandemic by delivering expertly crafted cocktails to eager consumers. Delivered monthly or quarterly, cocktail lovers receive a tailor-made box which includes up to 12 bottled, DIY and ready-to-drink cocktails, as well as a surprise gift in each and every box. What’s not to love?

Another start-up disrupting the market is Paxton & Whitfield, an artisanal cheesemonger delivering hand-cut cheeses from the Cotswolds. Customers can choose between a bronze (2 month), silver (6 month) or gold (12 month) subscription package. Boxes are delivered on Thursdays, carefully chosen by the business so that customers are ready to host cheese-tastings with friends and family over the weekend.

The Cocktail Society and Paxton & Whitfield represent two companies who have taken the time to understand who their customers are, and how they’d best like to enjoy their products. And while these two companies have successfully cracked the market, many others have not. In fact, product subscriptions compared to content subscriptions like Netflix or service subscriptions such as PureGym, are struggling to retain customers.

Which begs the question, what can subscription service businesses do to attract loyal customers?

1. Optimise the Customer Experience across Touchpoints  

One of the most attractive features of a subscription service is how easy it can make our lives. Think about a weekly grocery shop that remembers all your favourite items, or the fact that you’re always logged into Spotify where you can access any song or podcast at the touch of a button. In many ways, we can “set and forget” subscriptions as they’ll be there when we need them.

The problem is that if there are no contact points at all, then we can forget about them all together and become “sleepers”. In fact, 40% of individuals globally don’t even engage with their subscription in the first month. This may seem like an easy win for companies as they still make a profit regardless of whether their service is being used or not – but when these sleepers finally do wake up and are confronted with the knowledge that they’re paying for something and not benefiting from it, they cancel, with 66% of sleepers cancelling within the first year. This is an issue primarily experienced by content and service subscriptions, but less so for product subscriptions where customers receive regular deliveries forcing them to reassess both the economical and experiential value of their subscription.

With more frequent touchpoints, it is vital that businesses have innovative offerings to keep customers excited for their deliveries. This may be one of the reasons why The Cocktail Society includes little gifts in their deliveries.

2. Rethink Value

Several companies have used free trials to entice and excite potential customers. Think of Pret’s coffee subscription where individuals can get up to 5 free Barista-made drinks everyday for their first month. A “freemium” approach works well to reach more people but it is less successful in converting individuals to paid subscriptions. This speaks to the human tendency to perceive an item as having higher value when it’s free, whilst being sensitive to any subsequent price changes. Simply put, we don’t want to start paying £25 per month to get daily coffees from Pret knowing that the previous month we had received this for free. Psychologically, the price increase just seems too much, and this is why free trials tend not to increase conversation rates above discounted or paid trials.

For companies looking to attract and retain new customers, consider reinforcing the value of your product before a free trial, or introduce a discounted or paid trial as these have been proven to boost conversion.

3. Consider Occasion

Companies like Bloom and Wild have revolutionised how we interact with subscription services by allowing individuals to gift flower subscriptions to either themselves or their loved ones. In many ways, the gifting occasion should be something that new start-ups seriously consider as a means to tap in to and grow. In fact, research shows that 33% of individuals who sign up to subscription services have received them as a gift, whilst 42% do so as because they’ve gifted it to themselves as a treat, revealing how profitable gifting and self-gifting occasions can be.

Understanding the shift in consumer behaviour around celebrations allows subscription services to thrive in a market where individuals seek innovative, personalised and convenient gifts. This is something that start-ups should take full advantage of in their awareness and acquisition campaigns.

Looking Ahead

The subscription economy has seen tremendous growth over the past few years and it’s showing no signs of slowing down any time soon. Tapping into key moments and understanding consumer behaviour is essential for companies to grow and retain subscribers. This is even more vital for subscriptions where customers are faced with regular touchpoints, for example those delivering food, beauty and health products. Here lies an opportunity to leverage research from the field of behavioural science to grow a loyal customer base.


At Behave, we understand human behaviour and apply these behavioural insights to help drive success for our subscription service clients like Britbox

Contact us now to see how our behavioural consultancy can help your business.

Lauren Stephenson - Behavioural Analyst

Author:Lauren Stephenson - Behavioural Analyst

Lauren studied Psychology at the University of Cape Town and completed a masters in Behavioural Economics at the University of Bath. At Behave, Lauren uses leading behavioural technologies to understand consumer attitudes, motivations and behaviours to close the gap between what individuals say they do, and what they actually do.