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Aug 28

Customers Don’t Trust Subscriptions

Posted by Jennifer on Wednesday, August 28th, 2013 and filed under Blog Posts, Featured

Consumers have spoken. An alarming 80% say they regret signing up for subscription services to receive products on a monthly basis. This customer retention model is quite simply going the way of the dinosaurs. Online and mobile shopping options negate the need for consumers to sign up for monthly re-orders, and customers shy away from brands that only offer this method of purchasing.

Recently, GimmeAnother, launched a survey that polled a randomized group of 1,000 online shoppers and asked the question: “Have you ever subscribed to a monthly re-order program and regretted it later?” More than 65% of consumers said, “I have never subscribed to one of these.” And of those who have subscribed to a subscription service in the past, more than 80% said they regretted it.

“Consumers drop out of subscription services not because they dislike your product but because the quantity and timing elements don’t match their needs,” says Jon Roketenetz, GimmeAnother’s CEO and president. “Retailers want to offer convenience, but there’s nothing convenient about not having coffee beans because your monthly supply hasn’t arrived yet. And conversely, I don’t need 10 pounds of coffee taking up valuable pantry space.”

For the retailer, the subscription model has always held the promise of repeat revenue, but if customers drop out some time after they sign up—as survey results suggest—that revenue goes down the toilet. And there’s also the possibility that the retailer-customer relationship gets tarnished. “A subscription can actually create anti-loyalty,” says Jon. “As a consumer, it can give me the sense that a company is not doing right by me. Essentially, they don’t trust me to purchase their product again. And ultimately, that makes me less likely to trust their product.”