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The Real Cost of Customer Contact

Low-touch and No-touch Subscription Systems drive growth, profit, and customer satisfaction!
Posted 6-01-2017 by RevX Systems

The key to building a successful subscription business with unrestricted growth and increasing profit margins, is to have the operational and technological capability to roll out a subscription service which the subscriber can manage entirely on their own - it's called Delivering the Perfect Order.

We talk with our customers often about the cost of subscriber contact and how to minimize it.  While there are a variety of reasons why subscribers contact a service provider, the universal reason is because they can't achieve what they needed on their own, or something isn't clear to them.  That said, there is the occasional fringe case where a particular subscriber population is more challenged than others - but we've found that too can be overcome with more creative efforts as well.

The RevX approach to minimizing customer contact is a 3 tiered approach and we describe it as follows.

Tier 1 Subscriber Acquisition (sign-up, registration, on-boarding, ...)
Studies have shown that new visitors form an opinion of your purchase experience in less than 30 seconds before deciding to move-on or call - and that's a generous number.  They ask themselves questions like "What am I buying?", "What does it cost?", "How does the product work?", "What if I need more allowances of usage?".  If you're trying to sell this service like you would a case of soda, you're not likely answering these questions very effectively.  While eCommerce solutions (shopping carts) are a great approach to conventional product sales, subscriptions are fundamentally different in this way - they cannot be sold like a shipped good in a meaningful way.

As a result, providers who try this often experience very high customer contact and attrition due to miss-understandings of the service or they're generally unsatisfied with the purchase experience.  To make things worse, some of the subscribers you're left with may have consumed many months worth of gross profit resulting from difficulties getting signed up or activated. 

A well branded, easy to use signup experience is critical in achieving touch less customer acquisition and subscription activation!

Some of the most common mistakes we see providers make:

  • Pricing is too complicated (subscribers may not understand what they're buying)
     
  • Activation Uncertainty (subscribers may not understand what to do next)
     
  • Disconnected Systems (drives subscriber abandonment when things don't work)

Lastly, a successful subscriber purchase should include a welcome kit letter that clearly explains an assortment of items related to your service.  The welcome letter should include:

  • How a subscriber is billed and what usage charges or overages apply - "IF" any.  Bill shock is a big reason customers cancel or otherwise reach out and contact you after the first month of service.
     
  • How the product works on a specific level.  You should consider including references to a user's guide, video links, and other online resources that may help the new subscriber get the most out of their new purchase.
     
  • What to do next in the event your service is associated with a connected device.  Make sure it's clear to the new subscriber how they go about activating the device element of their new subscription.  Go so far as to give them instructions on what needs to be done to the device - if anything in terms of charging, accessing screens or functions on the unit.
     
  • How to get help if they need it.  If all else fails, you should provide access to a broader repository of information.  For instance, online user guides instead just a few strategic references.  FAQ's or other how-to videos that might answer their questions. 

Tier 2 Subscriber Self-Care (a My Account experience to manage their subscription and billing history)
A comprehensive and always-on self-care systems is your round the clock concierge service for customers who wish to maintain their account when and where they please.  While this seems like an obvious requirement, it's mind boggling how much of a struggle this can be for many organizations making the switch from conventional supply chain revenue to that of subscription revenue model.

An online tool for subscribers to manage their relationship with you is a new requirement for someone who previously sold items out of a shopping cart.  The shopping cart model was a fire and forget approach to selling.  Things like Account Maintenance were never really considered because it was thought once the transaction is settled and the goods are shipped - servicing that revenue was complete ... with the exception of RMA's of course.  Nothing could be further from the truth in a subscription model.

A good self-care solution will provide at minimum:

  • Will be branded and look similar to your existing web presence
     
  • The ability to manage your basic account profile including password and contact preferences
     
  • The ability to manage your payment information and review billing history
     
  • The ability to manage your active subscriptions (upgrades, downgrades, activations, suspensions, deactivations)
     
  • The ability to review subscription usage and status information
     
  • The ability get help with an assortment of other issues

Tier 3 Reminders and Notifications (e-mail notices regarding their subscriptions)
In a perfect world, your subscribers won't even need to access the billing portal.  You'll sign them up, they'll use the service and until something comes along that requries their engagement - you'll never hear from them.  A great example of this would be when a subscribers credit card expires and they need to update their payment method on file.

There are terrific ways to provide your subscribers with relevant and timely information for which they don't need to access self-care to receive.  Anytime an activity takes place on a subscribers account, it's important to send them an easy to read and pertinent email that describes what's taken place.  A payment receipt is a great example of this.  If you've charged a customers credit card for their monthly service, a payment receipt with useful tips in it is generally very well received.  Aside from the obvious of "Thank you" your payment was processed and it was this much ... a good example of useful information is actually describing what they can expect to see on their credit card statement and that it might take a few days to show up.  This gives the subscriber an indicator of what to look for on their upcoming statement from their financial institution.

 

The bottom line is - anywhere you can clearly communicate with a subscriber to minimize the possibility of contact, DO SO!  It will continue to reward you and the subscriber in many ways.

Have more questions? - (949) 200-7589