Subscriber Acquisition

Broad Benchmark Data Provides Meaningful Insights

Benchmark data provides an invaluable gauge for measuring business performance but is often difficult to obtain. Recurly has unique visibility into a variety of subscription metrics, and the Recurly Research team analyzed subscriber acquisition methods over a 15-month period, using a sample of more than 1,200 subscription commerce sites from a wide range of industries.

See how this analysis can help fine-tune subscriber acquisition efforts in your business.

Subscription Trials as an Acquisition Tool

What industries are most likely to offer free subscription trials?

Our study found that both B2B and B2C businesses are equally likely to offer free subscription trials. However, OTT/SVOD providers and businesses in Media & Entertainment use trials at a higher rate than other industries.

These types of businesses may use free trials more frequently due to the wide variety of content that customers can sample before deciding to sign up.

How does trial length compare to plan length?

Median Trial Length
Monthly Plans

  • All
  • B2C
  • B2B

Median Trial Length
Quarterly Plans

Median Trial Length
Annual Plans

  • All
  • B2C
  • B2B
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Trial Length

The number of days between a trial's start date and end date.

Plan Length

This is the "billing interval" or the frequency with which a subscriber is billed, measured in days.

Median Trial Length
Monthly Plans by Industry

  • Median Trial Length: 30 days

  • Median Trial Length: 30 days

  • Median Trial Length: 30 days

  • Median Trial Length: 14 days

  • Median Trial Length: 15 days

  • Median Trial Length: 14 days

  • Median Trial Length: 10 days

How do free trials impact conversion to paid subscriptions?

Across the board, conversion rates for subscription trials are impressive. In particular, industries that were above the overall median rate for trial conversions are Consumer Services and SaaS, with median conversion rates of 66.8% and 62.4%, respectively.

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Trial Conversion Rate

The total number of subscriptions that started a trial and converted to paid divided by the total number of subscriptions that started a trial in the study period.

Trial Conversion Rates

40%

50%

60%

70%

80%

90%

All

59.9%

B2C

56.8%

B2B

66.0%

54.4% - Annual Plans

59.8% - Monthly Plans

59.9% - Annual Plans

68.8% - Monthly Plans

How does the length of a trial influence conversion rates?

The length of a plan, as opposed to the length of a trial, is a key indicator for conversion rates, especially in B2B businesses.

Monthly plans in B2B businesses had conversion rates 8.9% higher than annual plans. B2C monthly plans were also higher, by 5.4%.

However, when we looked at conversion rates for different trial lengths, we did not see an impact on conversions. We found the upper quartile of sites with the highest conversion rates had the same median trial length as the entire sample set.

B2C businesses tend to offer longer trial periods than their B2B counterparts, especially for annual plans.

Are there industries in which subscriptions that convert are more likely to have a longer lifetime?

Yes. In our analysis, Consumer Services, Business Services, and Media & Entertainment had the highest "Trial Lifetime Ratio" for subscriptions that convert from trial to paid (compared to those that did not begin with a trial). This ratio is determined by comparing the median lifetime of subscriptions that started with a trial vs. those that started without a trial.

In particular, Media & Entertainment businesses had a median Trial Lifetime Ratio approximately 20% higher than the overall median across all industries.

Our analysis also showed that B2C businesses were more successful in retaining trial subscriptions for a longer period (compared to non-trial subscriptions) than their B2B counterparts.

Subscription Lifetime Methodology

This is measured from the time a subscription converts to paid, since a subscription doesn't contribute value during the free trial period until it has converted, i.e. until the customer has actually been acquired.

Key Takeaways

  • B2B businesses have slightly shorter trial lengths but higher trial conversion rates.
  • Most businesses which provide a free trial allow prospects at least two weeks to try their product or service but generally do not offer trials that last more than a month.
  • B2C businesses have slightly longer trial lengths and a higher Trial Lifetime Ratio.
  • For annual plans in particular, B2C companies which offer trials tend to have much longer trial lengths for those plans than B2B companies.
  • Education has the shortest median trial length of the industries studied. This may be because education is often seasonal or most relevant during limited time periods. A lengthy trial may risk giving away too much value by fulfilling the prospect’s needs without them having to purchase the subscription.

Coupons as an Acquisition Tool

Does coupon usage result in longer subscription retention?

We compared subscriptions that had a coupon discount applied to their first billing cycle to those that did not. From this comparison, we created a metric called the Coupon Lifetime Ratio. This metric helps us determine the impact of coupon discounts on subscription lifetime when used as an acquisition method.

Coupon Lifetime Ratio
All Business Types

0

0.5

1.0

1.5

2.0

All

1.13

B2C

1.01

B2B

1.22

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Coupon Lifetime Ratio

Duration of subscriptions that began with a coupon as compared to (divided by) duration of subscriptions that did not begin with a coupon.

A Coupon Lifetime Ratio above 1 means that the median coupon subscription lasts longer than the median non-coupon subscription.

A Coupon Lifetime Ratio below 1 means that the median coupon subscription is shorter than the median non-coupon subscription.

Coupon Lifetime Ratio
By Industry

0

1.0

Media & Entertainment

1.02

Consumer Goods

.89

Consumer Services

1.21

SaaS

1.29

OTT/SVOD

.97

Business Services

1.17

Education

1.14

Box of the Month

.88

Coupon Lifetime Ratio Methodology

Recurly allows coupons to be applied to a specific subscription or at the account level. For this study, we only included coupons applied to subscriptions.

Some of the sites studied used coupons discounted by 100%. We chose not to consider these true “discounts” for the purposes of the study, and these coupons (approximately 32% of the total number of coupons used by the sites in the study) were eliminated from this analysis.

What are typical discount rates applied to subscription plans?

Coupon Discount Rates
All Business Types

10th Percentile

25th Percentile

50th Percentile

75th Percentile

90th Percentile

10%

20%

30%

40%

50%

Discount Rate

Coupon Discount Rates
By Industry

20%

30%

40%

50%

42% - B2B

30% - B2C

37% - OTT/SVOD

40% - Education

43% - Media & Entertainment

37% - SaaS

31% - Business Services

37% - Consumer Services

25% - Consumer Goods

25% - Box of the Month

Coupon Discount Rate Methodology

Recurly offers the option to set up coupon discounts as a percentage of the total purchase or as a fixed amount. For fixed amount coupons, we calculated the discount percentage by dividing the discount amount by the undiscounted price of the subscription on the first invoice. This methodology was used for both monthly and yearly plans.

Is there a correlation between discount rates and a subscription’s duration?

Yes. Our data showed a correlation between a larger discount and a longer subscription duration, however it must be noted that correlation does not necessarily mean causation. In other words, offering a larger discount at sign-up will not automatically produce higher customer retention.

We found that B2B companies tend to offer a larger discount than B2C companies at a median of 42% vs. 30%, respectively and that B2B companies also have a larger Coupon Lifetime Ratio at 1.22 vs. 1.01 for B2C companies.

The larger discounts offered by B2B businesses may demonstrate that the discount is an effective sales tool which makes the customer feel that they are getting a good price. This may in turn encourage them to keep the subscription longer.

Key Takeaways

In general, a subscription that starts with a coupon has a longer duration than one that does not. This effect is particularly strong for B2B businesses which tend to offer a larger discount for new sign-ups.

E-commerce and Box of the Month

  • These businesses did not reach a coupon lifetime ratio of 1.
    In other words, their median coupon subscription did not last longer than the median non-coupon subscription.

  • Previous Recurly Research data shows that these businesses also tend to have a higher churn rate.

  • These businesses have the lowest median coupon discount percentage.
    This could be due to physical goods businesses having smaller margins, making large discounts not cost-effective.

Key Takeaways

In general, a subscription that starts with a coupon has a longer duration than one that does not. This effect is particularly strong for B2B businesses which tend to offer a larger discount for new sign-ups.

E-commerce and Box of the Month

  • These businesses did not reach a coupon lifetime ratio of 1.
    In other words, their median coupon subscription did not last longer than the median non-coupon subscription.

  • Previous Recurly Research data shows that these businesses also tend to have a higher churn rate.

  • These businesses have the lowest median coupon discount percentage.
    This could be due to physical goods businesses having smaller margins, making large discounts not cost-effective.

Understanding how to improve subscriber acquisition is the first step, taking action is the next.

The Art & Science of Subscriber Acquisition

Discover proven strategies for acquiring profitable subscribers.

View guide

Key Metrics for Subscription Commerce

Learn how to measure the health of your subscription business.

View list

Methodology

We examined a sample of over 1,200 subscription sites which used the Recurly platform. The study encompassed a period of 15 months, from January 2016 to March 2017. All data was aggregated and anonymized. Our study uses median, 25th, and 75th percentile values which eliminate outliers and provide a more accurate representation of the data.

Subscription Lifetime

This is measured from the time a subscription converts to paid, since a subscription doesn’t contribute value during the free trial period until it has converted, i.e. until the customer has actually been acquired. View related data

Coupons Lifetime Ratio

Recurly allows coupons to be applied to a specific subscription or at the account level. For this study, we only included coupons applied to subscriptions.

Some of the sites studied used coupons discounted by 100%. We chose not to consider these true "discounts" for the purposes of the study, and these coupons (approximately 32% of the total number of coupons used by the sites in the study) were eliminated from this analysis. View related data

Coupon Discount Rate

Recurly offers the option to set up coupon discounts as a percentage of the total purchase or as a fixed amount. For fixed amount coupons, we calculated the discount percentage by dividing the discount amount by the undiscounted price of the subscription on the first invoice. This methodology was used for both monthly and yearly plans. View related data