How to Leverage Your Existing Subscribers to Acquire More
In our previous post in this series, we talked about using data to identify your most profitable subscribers and the metrics to measure campaign and channel profitability. In this post, we’ll focus on how you can leverage your existing subscribers to acquire more.
You may have heard the adage, “take the cash, let the credit go.” In other words, seize the opportunity you have in front of you. Gift subscriptions as an acquisition method illustrate the value of this phrase well. Gift subscriptions keep your acquisition costs low by leveraging the enthusiasm of your existing customers (i.e. what’s already in front of you) and brand advocates to identify potential new subscribers for you.
Here’s how it works: The gift giver purchases a gift subscription, thus covering the cost of the purchase. Simultaneously, your business is provided “free” brand exposure and the opportunity to convert a prospect into a new subscriber at the end of their gift term. If you can successfully convert the giftee to a paid subscriber, then you’ve proven the efficacy of this new marketing and customer acquisition channel. Your business thus has one more tool in its belt to acquire new customers by utilizing gift subscriptions.
In order to track the effectiveness of gift subscriptions on your acquisition efforts, you’ll want to measure the following metrics:
- Total number of Redemptions
- Definition: the total number of gift subscriptions that have been redeemed after purchase
- Value: Even if the recipient does not redeem the gift subscription, the business receives revenue. Of course, the opportunity to win over another prospect is increased when the recipient actually redeems their gift subscription and begins receiving and enjoying their subscription!
- Conversion rate
- Definition: the total number of customers that redeemed a gift subscription then converted to a paid subscriber divided by the total number of gift subscriptions purchased.
- Value: This metric helps you understand whether or not gift subscriptions are successfully being used as an acquisition method. To dig in even further, look at the conversion rate by a specific plan, price point, or by the attributes of the gift subscription purchaser themselves.
- Definition: the length of time between gift subscription purchase (by the gifter) and paid conversion of the recipient
- Value: While measuring the time-to-redemption is important for understanding trends in gift-subscription usage, the time-to-conversion is the real “time-based” metric that you should track to evaluate acquisition efficiency. Keeping in mind that gift subscription lengths can vary and a multi-month gift is not a bad thing—the shorter the time to conversion, the sooner the new customer revenue is realized.
How Recurly Helps: Recurly offers rich gift subscription, including both gift plans and gift cards. This makes it extremely easy to set up and start realizing the acquisition value of this channel.
Additionally, Recurly provides indexes of all purchased gift cards as well as status indicators so businesses can quickly view the number of gift cards purchased, partially redeemed, and fully redeemed.
Finally, users can export information on all unique gift card purchases, including a few key customer data points such as: gift card created_at date, redeemed_at date, subscriber converted_at date (the date the customer using a gift card converted to a paid subscriber) and subscription expired_at date.
The table below provides an example of some of the key gifting data points tracked and exported via Recurly.
Lastly, while gifting can be an efficient acquisition method that leverages existing subscribers to acquire more customers, keep in mind it might also give you valuable information about your most loyal customers—the gift givers. Analyzing the data you have about the existing subscribers who purchased gift subscriptions will help you understand more about your high-value subscribers. This information should help improve your efforts to identify and assess your target market, ultimately improving targeting and subscriber acquisition.