If you’re responsible for revenue at a SaaS, online subscription, or membership organization, this is for you. With 15+ years of experience in the online subscription space, I’ve built a tried and true framework for achieving organizational health for online recurring revenue businesses.
If the following 5,000 or so words resonate with you, there’s a link at the bottom to request a free 60-minute strategy call with me.
Treat this article as a litmus test: how does your business stack up to what a healthy, thriving, wildly profitable subscription company looks like?
It might seem obvious to start by picking on Sales.
After all, sales takes a lot of heat when things aren’t looking so good. They are often the squeaky wheel in an organization, and my job is to help provide the grease.
But I often find that Marketing, Customer Success, and Product all need a little grease too, to make the subscription flywheel spin in perpetual motion. Product is the linchpin of the flywheel. But that flywheel won’t turn a single revolution without tight collaboration with the revenue generating arms of the business: Marketing, Sales, and Customer Success.
The degree to which Product successfully communicates with Marketing, Sales, and Customer Success (as they are all inextricably connected) directly affects sales & expansion revenue – and therefore organizational health.
A SaaS, subscription, or membership company that can communicate well internally and work toward a common goal can scale faster, more effectively, and more profitably than one with siloed departments with ever-increasing levels of resentment for one another. That’s obvious, right? Not so fast.
Take quick stock of the degree to which your Leadership would agree with the following:
Would each member of your Leadership team provide the same answers to these questions?
Throughout any engagement with a subscription based business, I take a holistic approach to organizational health. Leadership, strategy, operations, finances, and people are the lens through which I see the following 4 core areas of focus in a subscription business:
*My primary goal for SMB(small & midsized businesses): build a robust email list of qualified prospects from which to strategically nurture (via email, retargeting campaigns, influencer relationships, content) based on each prospect’s stage of awareness. Then, successfully hand off sales-qualified leads (SQLs) to Sales at the appropriate time.
At its core, I believe that sales is problem solving. B2B sales teams must be able to effectively diagnose and frame business problems to a buying committee, and then present creative solutions to solve that problem. They must be able to quickly and effectively become fluent in prospects’ industries; tease out problems, objections, and key stakeholders; then design a solution to bridge those gaps and present it at the right time, to the right people.
The most successful salespeople do what they say they’re going to do when they say they’re going to do it. They are relentless in their pursuit of excellence and exceeding customers’ expectations.
For Sales to be successful, fluid communication with Marketing, Customer Success, and Product is absolutely necessary, as is proper technology (CRM software, etc.), implementation, and adoption amongst sales staff.
Comprehensive discovery is key to a successful selling relationship. Seek first to understand, then, and only then, to be understood. Incisive and thoughtful questioning is the foundation from which to build the case of how your solution can deliver the outcomes your future subscriber needs and expects.
As the old adage goes, nothing happens until someone sells something. Let’s dive in on how to sell subscriptions.
Goal: create repeatable, scalable processes to move prospects seamlessly through the stages of awareness towards a purchase decision as efficiently as possible.
This entire document is written primarily with the SMB sector in mind, though subscription organizations with sales teams need structure and strategy to sell to enterprise level clients. Enterprise level sales organizations also require highly targeted outbound efforts which are not covered below, though I am happy to discuss on an individual basis. Most of the strategies below can be applied with varying levels of automation, absent a dedicated sales team and/or for lower tier clients.
A person who fits a company’s ICP but is not aware that the company exists or the problem it can help them solve.
The prospect is aware they have a problem and that the company exists. The prospect might download a lead magnet at this stage as they move toward active consideration of possible solutions to their problem. Marketing should move a prospect from Unaware —> Solution Aware —> Product Aware or from Solution Aware —> Product Aware before passing the prospect on to a sales rep (or an SDR).
The prospect is now actively considering the available options to solve their problem and could be considered a lead. They are receiving a carefully planned lead nurture campaign. A lead is moving toward Most Aware when they are engaging with your nurture campaign (opening emails, clicking links in emails or retargeting ads, visiting the company’s website, downloading additional content marketing assets, chatting with a rep via on site chat, talking to a rep on the phone or via text, and/or responding to emails from sales). Leads should be transferred from SDRs to sales reps at this stage. Unqualified prospects should be disqualified from being a “lead” at this stage and put on a long term lead nurture campaign.
(High intent to purchase) – The prospect is now a hot lead, ready to pay for the solution they believe will best solve their problem and are showing clear buying signals for the product – those signals should mirror the actions that current Power Users took when they were considering making a purchase. Through the nurture campaign, the lead should have been told the story of why the company’s offering will solve their problem (backed up with social proof) and then asked for action (free trial, attend a webinar, purchase offering, get on the phone with sales, etc.).
Sales must clearly and consistently communicate with:
Customer Success systems are the means by which companies help their customers achieve the success the company advertised and play a central role in maximizing cLTV.
Companies start setting expectations of what outcomes their prospects can expect from their solution with the first marketing touch. Sales teams skillfully craft a tailored solution based on the specific outcomes the prospect identifies. Now it’s time for Customer Success to pave the way for new subscribers to achieve those outcomes and feel successful as fast as possible.
Proper expectation setting, creating a culture of feedback, effective onboarding, using customer service tools, keeping tabs on customer engagement, and proper off-boarding are foundational to Customer Success.
**Harvard Business Review tells us that it costs between 5 and 25 times as much to acquire a new customer as it does to keep an existing one. Customer Success should be a top priority in a recurring revenue organization. **
Creating SOPs for every piece of the customer success puzzle for maximum efficiency, scalability, and team member onboarding is imperative.
Customer Success must set up automated processes throughout customer onboarding and ongoing management to truly deliver on the promises made to new customers at scale.
Customer Success KPIs for online subscription based businesses: cLTV, CRC (customer retention cost), churn rate (and/or retention rate), ARR(annual recurring revenue), MRR(monthly recurring revenue), ARPU(average revenue per user), and upsell percentage.
The overarching theme of ongoing customer success is to create a culture where feedback is not only accepted, but carefully considered and when appropriate, acted upon. The company must set the expectation during the onboarding process that helpful staff members are just an email, online chat, PM, or a phone call away to help remove roadblocks to a customer’s success. Reinforce that attitude through online community interactions, retargeting ads, and on a one-on-one basis.
Customers of recurring revenue businesses make the decision to “buy” every single renewal period and must continuously derive value from the product. It’s important to remind subscribers how amazing the product and the company are and of the success the customer is achieving.
Surveying current customers one to two times per year is absolutely necessary. This furthers the culture of feedback and will undoubtedly unearth useful information that will improve organizational decision making. Survey different segments of subscribers based on their engagement level with the product. Ask Power Users different questions than segments who are least engaged. More on the tech required for proper customer segmentation and hyper-personalized engagement tracking in the Engagement Tracking section below.
Onboarding is the process of taking a brand new subscriber, beginning at sign up, on the fastest path to value recognition, and over time nudging them along the path to becoming a Power User. Onboarding is a key fixture of a long term retention strategy.
The onboarding experience should mirror the messaging a prospect received during the lead nurture campaign and promises made by Sales. In other words, the expectations set during marketing & lead nurture should be met and exceeded once the prospect buys: underpromise, overdeliver. Do that by explaining how the new customer can fully benefit from each and every aspect advertised about the product in an intuitive way through a combination of email, on-site feature tours, in-app messaging, videos, in-app pop-ups, and more.
The effectiveness of onboarding should be measured and tested, just like marketing campaigns.
Customize the onboarding process if possible/necessary by allowing new customers to self-select their top priorities & desired outcomes with the product. Marketing should have explained the “what” and “why” of the product’s features, the onboarding process should explain the “how” to use each feature and receive its full benefit/outcome.
Since the goal of onboarding is to take a brand new customer on the fastest path to value recognition, and over time nudge them along the path to become a Power User, you need to know what steps current Power Users have taken in the past to achieve power user status, and strategically send new customers on that same journey.
Engagement tracking simply means understanding and keeping tabs on how customers are interacting (or not!) with the product and then taking appropriate action to either bring a disengaged subscriber back into participation and value recognition, or conversely, to offer the most engaged subscribers relevant, useful, upsells to maximize their cLTV.
The path to maximizing profitability in a recurring revenue based business is not just acquiring new customer, but keeping track of who is most and least engaged, and then doing something about it.
Get the technology necessary in place to accurately tag and segment customers based on engagement, usage, or however a company measures value recognition. [Intercom] is one of the top tools available for hyper-personalized onboarding, engagement tracking, user segmentation, and in-app messaging. They allow online companies to send the right message, to the right person, at the right time.
Once a tracking tool is in place, a process document that explains in detail what actions need to be taken based on engagement tracking information should be created and implemented.
If a customer success team doesn’t have visibility into engagement metrics and SOPs for how to interpret and take action on that data, there is no clear path to maximizing cLTV.
There are 2 primary scenarios to prepare for in this particular SOP: how to bring disengaged subscribers back into active participation and value recognition, and second, how to offer appropriate upsells to the most engaged subscribers (Power Users).
Relentlessly track engagement metrics and the results of re-engagement and upsell campaigns. If we take Harvard Business Review’s retention stats seriously (that it costs 5 to 25 times as much to bring on a new customer as it does to retain an existing one), subscription organizations should be paying an order of magnitude more attention and care to engagement metrics than marketing metrics.
Those subscriber segments that are most engaged should be offered appropriate upsell opportunities for tangential products or services, for example: a higher tier subscription with more benefits, access to a mastermind, a tangential product, a cross-sell offer that results in an affiliate fee for the company, etc.
New customer acquisition in a subscription business is certainly of high importance, but retention is mission critical. If new subscribers are jumping ship early on, either Marketing & Sales are bringing in the wrong subscribers, Customer Success is asleep on the job, or the Product is subpar. Fix your leaky bucket.
A carefully curated online community can be one of the most effective retention strategies to employ for an online recurring revenue business.
Often on a membership website, members join for the content, but end up sticking around because of the community. Some type of group interaction in the form of an online discussion forum or Facebook Group can be the differentiator between a membership site where people show up, consume the content, and churn before the 90 day mark, versus those who stay for many months or even years because of the value and relationships they are receiving from that group interaction.
SaaS and subscription based businesses can also enjoy the benefits of an online community. Granted, an online community is not valuable and appropriate in every scenario, but that’s often the exception rather than the rule.
At the outset, running an online community requires a great deal of intentionality, time, and cultivation. Starting a community is not a decision that should be taken lightly, but when done well, the benefits far outweigh the costs.
To begin, cast a vision for what a successful community would look given the company’s type of customers + offering, and work backwards to create a strategy for bringing that vision to life. What platform would be best to use? What kinds of discussions would happen there? How will participants get the most value from it? What does a "successful" community look like in this niche?
As with every part of running a recurring revenue business, proper expectation setting from the outset is necessary. Marketing campaigns should reflect the community accurately. Hopefully that means a kind, welcoming, helpful bunch of people who are invested in each other's success. Then, during the onboarding process, make sure the community's rules and guidelines are agreed upon by the new group member before they can interact with others.
On an ongoing basis, its Customer Success’ responsibility to enforce those rules (through contributors & moderators) and cultivate a community that reflects the vision cast for it from the beginning.
Customer service generally boils down to problem solving with current customers. As with every other area of customer success, dedicated staff members should “own” the customer service department.
Using a purpose built tool for support tickets and the overall customer service experience is hugely important with regard to systems, processes, automation, and delegation. SMBs relying on an email account or spreadsheet to manage support tickets is insufficient, unscalable, and unprofessional.
Whenever speaking with a customer, reps must have empathy, show kindness, apologize when necessary, and be solution oriented. The “voice” and tone of customer service reps should reflect the overall company persona.
Reps should have dedicated SOPs for handling common problems, following up, and feedback loops, as well as clear directives on when and how to escalate a support ticket.
When customer are upset, treat that as an opportunity to delight them – think How to Win Friends & Influence People! If that subscriber’s experience is so overwhelmingly positive when they approach customer service for help, research shows that they will actually be a happier customer than before they had the problem.
Often overlooked, proper off-boarding of subscribers is essential for recurring revenue businesses to best understand the customer journey. Companies must understand the reasons their subscribers leave, identify off-ramps, and make adjustments in every relevant area of the revenue funnel (Marketing, Sales, Customer Success/retention) to lower churn.
The decision for a customer to cancel should be very difficult, whereas the process to do so should be simple and straightforward. The exit should not be under heavy guard or hard to find. An automated exit survey should be in place and Customer Success should be in charge of instigating action based on those replies.
Subscribers should be given the option to downgrade or pause their account, asked why they’re cancelling on one screen and given a corresponding “fix” offer on the next in an attempt to “save” the customer. If you have the staff for it, a manned chat bot embedded in cancellation related pages can be an effective tool to aid retention and better understand customers.
Bottom line: Set accurate expectations – beginning with the very first marketing touch – of what customers can expect to get when they're learning about the company’s product or service and what it has to offer. If prospects are told exactly what to expect and they indicate they're good with that, (by making the purchase…) the relationship is off to a great start!
Underpromise, overdeliver + delight = Power Users.
Miscommunication about product functionality, delivery dates, feature roadmaps, upcoming content, etc. is the source of much internal consternation in any online recurring revenue business. The Head of Product should take great pains to communicate effectively with Marketing, Sales, and Customer Success to ensure consistent messaging on an ongoing basis.
Bridging communication gaps between Product and all other departments is foundational to a successful recurring revenue business. Creating & successfully implementing SOPs for how this will be handled is key for each of my consulting engagements.
I believe in value-based pricing, which can take many forms. I help my clients determine key value metrics and develop appropriate pricing strategies and ways to test them. Pricing & upsell strategy should be an ever-evolving practice in a recurring revenue business and tested constantly.
Running a scalable subscription based company is tough. It’s inherently more complex than the single-sale ownership model and requires a unique toolkit. If you’re firing on all cylinders and have already implemented everything above, good on you! – pass this to a friend who needs a nudge in the right direction.
My consulting methodology is a holistic approach that produces measurable results and creates a foundation from which to scale an online recurring revenue business.
Seventeen years of sales experience, consulting work in a variety of industries, and a relentless pursuit to continuously improve my business skills has given me a knack for incisively identifying problems and designing effective solutions for my clients.
Request a free 60-minute strategy call now and set your subscription company on a path to scaling, profitability, and organizational health!
Kind words about the Subscription Coach:
An hour with Amanda was time very well spent! She asked me some tough questions about processes, our ideal customers, my role and how our sales operation can scale. It sparked a lot of discussion among our team and has led to meaningful changes in how we approach sales. Count yourself among the luckiest of salespeople if you get to spend time with Amanda.
Jimmy Daly, Marketing Director | Animalz
Why spend 6 months of burn looking for answers if you can just spend a few hours picking Amanda's brain? She knew what questions to ask, did a thorough assessment of my subscription box business, and helped set me on the right path toward scaling.
Jack Benzaquen, Founder & CEO | Duradry
Amanda has gone above and beyond as a consultant for us. She is true to her word and gets work done when she says she is going to do it. She has a depth of knowledge that has helped us to solve some business problems we've been unable to tackle in house. Amanda has worked with us on two projects and has exceeded our expectations both times. Her assistance has been invaluable to us and I would recommend her marketing and sales expertise to anyone.
Matt Tagliavia, Senior Director of Marketing | InventHelp
Amanda knew all the right questions to ask. She helped me hone my message, identify my audience, and understand which marketing strategies would be most effective. I left our time together with actionable steps and an abundance of resources that are helping me move forward with my business. Amanda met me where I'm at and quickly moved me to the next level.
Amy Norvell, Founder | Nurture Your Joy
Amanda was a total pro. She obviously knows the membership space well, and more than that, was super present with me on each of our phone calls. She listened very well to my questions, clarified the big points, made sure I knew exactly what I needed, and then filled in the blanks very well. I was impressed with her initiative to bring up & research additional questions I hadn't previously considered. I love working with people who “know their stuff” AND are great to work with! I would definitely recommend Amanda to others working on memberships, and I'm sure I'll be calling on her again for additional help as needed.
Sonia Stringer, CEO | Business Academy for Women