Turn Reactive Responses into Proactive Business Strategies for Your Subscription Business

November 12, 2019

Developing a strong business strategy is one of the most important planning tools you have for ensuring the long-term success of your subscription company. 

Unfortunately, far too many people compromise their goals and ideas by reacting to what’s already happened—the problems and dilemmas caused by previous errors or a “firefighting” holding pattern that only offers short-term fixes.

Of course, reacting to issues is necessary for any business—as unsolved problems can damage customer trust, create delays and bottlenecks, or even cause business processes to fail altogether. We believe, though, that many of those issues can be fixed through your day-to-day operations or a “continual improvement process” that identifies and fixes underlying problems. In other words, we don’t think a purely reactive response is a good way to build or strengthen your business strategy.

Instead, we recommend looking a little further afield—thinking about the right vision, mission, goals, and planning that help your business reach out, expand, and be a leader in your industry. In this article, we’ll explore how to take some common situations and apply proactive thinking to help you dominate in the minds of your customers and the realities of your marketplace. 

You Can’t Move to a Proactive Business Strategy Overnight

If you’re used to building a strategy around yesterday’s issues, it can be difficult to make the switch to thinking about expansion and long-term planning. You need to develop an executive and workplace approach that looks beyond, “what do we need to fix?,” and asks, “how can we be bold?” 

You can’t develop a strong, proactive strategy if you’re just trying to stay afloat, as that will consume all your energy. Instead, focus on fixing business-critical issues, and once that’s done, start changing your perspective and moving gradually to a forward-looking mindset. 

One other point to keep in mind is that your reactive responses do need to live somewhere if they’re not in your business strategy. Add them to an issues log and ensure you’ve got resources in place to resolve underlying problems, rather than have them fall through the cracks. 

Let’s explore how proactive approaches can drive better business strategies across three common situations—retention, acquisition, and service. 

Customers Are Leaving Your Subscription Business

The Problem

You’ve seen an increase in the number of customers who are lapsing out of subscriptions. Your churn rate has increased and your retention rate has gone down.

The Reactive Response

Reactive responses to customers leaving might include:

  • Reducing the price of subscriptions to encourage customers to stay.
  • Communicating with customers to ask what the problem is and if there’s anything you can do to make them reconsider.
  • Trying to lock customers in for longer subscription periods.
  • Offering overly-generous incentives and promotions to retain your customer base.

The Proactive Business Strategy

Here’s how to take a more proactive approach to customers leaving:

  • Develop a customer success team that demonstrates the features, benefits, and values of your products and services and communicates those to customers throughout their time with your company.
  • Perform data analysis to identify the factors driving customers that leave versus those that renew and expand. This will make it easier to craft a personalized approach for the best actions to take with each customer to retain and grow them.
  • Create effective outreach communications at critical points in the customer lifecycle. This might include at the end of a trial period or when their subscription is about to lapse.
  • Interview customers about what their business needs are, then check how your products and services help them meet those requirements.
  • Boost customer engagement with your products and services through demonstrations and other methods.

Customer Acquisition Costs are Rising

The Problem

You’ve noticed that your paid marketing activities are not performing as strongly. Conversion rates are down, well-funded competitors are coming into the space, and you’re not getting the marketplace visibility and penetration you need.

The Reactive Response

Reactive responses to rising customer acquisition costs could include:

  • Doing nothing in the belief that things will work out.
  • Cutting your marketing budget because costs are going up too much and you can’t accurately measure ROI.
  • Boosting your marketing budget because you have to keep attracting new customers to maintain your customer base, no matter the cost.
  • Spreading your marketing dollars too thin by hitting multiple channels to try and drive up acquisition.

The Proactive Business Strategy

Here’s how to take a more proactive approach to rising customer acquisition costs:

  • Use customer success to turn loyal customers into advocates for your business and incentivize them to recommend you to colleagues and peers.
  • Invest in high-quality, evergreen content that focuses on providing the best information to potential customers, rather than taking a “hard sell” approach.
  • Focus on driving up retention rates so that customer acquisition doesn’t have to be such a drain on your resources. 

Customer Service is Draining Resources from Other Departments

The Problem

You’re spending too much time putting out fires and fixing customer issues. Customers are complaining about delays and a lack of communication. This is damaging trust in your products and services and leading to lower morale in your workforce.

The Reactive Response

Reactive responses to customer service issues could include:

  • Drafting in staff from other departments and paying overtime to deal with the backlog.
  • Insisting that staff work harder, faster, and longer, leading to more problems and unresolved issues.
  • Developing reactive communications based on how “noisy” a customer is.
  • Dealing only with the most pressing issues, not looking at lower priority incidents that are still causing customers some pain.

The Proactive Business Strategy

Here’s how to take a more proactive approach to customer service:

  • Build effective communications plans ahead of time, so you can apply the same high-quality messaging, even in the middle of a crisis.
  • Put a dedicated problem management team in place that can identify underlying root causes, together with the resources to fix them.
  • Publish tutorials and troubleshooting guides so customers can fix issues themselves without having to contact your customer service area.
  • Create notifications and status updates to all customers if a particular incident affects large parts of your client base.
  • Develop a link between customer service and application development so that ideas for improvement or optimization are added to the product roadmap.

We’re just scratching the surface of how powerful a proactive business strategy can be. Essentially, this type of planning puts you in control. It means you’re not jumping from issue to issue, but can develop the space to look clearly at what you need to do over the next 12 to 18 months to position your business for strong future success.

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