CHAPTER 01
Engagement – Make every interaction count
Ecommerce merchants offering physical products face a pivotal imperative: Acquisition has become increasingly tricky, while retention emerges as a primary growth initiative.
According to Recurly's State of Subscription report, the median acquisition rate across industries dropped from 4% in 2021 to 2.8% in 2024, reflecting market saturation and the growing challenge of subscriber growth.
For consumer goods and retail, the -4% subscriber change year over year signals intensifying competition and potential subscription fatigue in the product space.
Strategies for driving engagement
1. Rethink acquisition: Move beyond free trials & discounts
While once a staple acquisition strategy, free trials are losing their edge. According to Recurly data, free trial conversions have dropped from 46% to 33% across industries. While market saturation does play a role here, it’s clear there’s a larger shift at play: Businesses are realizing the importance of targeting high-quality subscribers rather than chasing after volume.
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Discounts and free trials might bring subscribers in, but they don’t necessarily make them stick around. Instead, companies should focus on pre-signup engagement — getting potential customers to interact with your brand’s content, understand its value, and see real use cases before they commit. This could mean offering interactive demos, exclusive behind-the-scenes content, free educational webinars, or early access to premium features. For example, Alaska Airlines’ "Alaska Access" program provides exclusive deals, priority booking, and members-only perks — creating value before customers even book a flight.
Similarly, brands can engage potential subscribers through interactive quizzes to recommend a best-fit plan (like this one from FabFitFun), invite them to private social media groups, or provide gamified experiences that encourage exploration. This approach not only reduces churn, but also ensures you’re acquiring subscribers who are more likely to stay (and grow) with your brand.
RECURLY IN ACTION
Optimize pre-signup engagement using Recurly Engage, which provides interactive and guided journeys for potential customers — ensuring a deeper connection before a subscription even begins. From interactive onboarding flows to clever upsell prompts and targeted retention campaigns, Engage enables teams to create personalized subscriber experiences that keep them coming back. By predicting and preventing churn through behavioral insights, you can also design cancel-save flows that specifically address at-risk customers, giving them compelling reasons to stay.
See how Recurly Engage can help you drive subscriber engagement
2. Usage = Value
The most reliable indicator of a loyal subscriber? How often they actually use your product or service. If a customer is consistently using your platform or receiving tangible benefits, they’re not just engaged — they’re invested. According to Gallup, “fully engaged customers represent a 23% premium in share of wallet, profitability, revenue and relationship growth over the average customer.”
Encouraging high usage not only boosts short-term engagement, but builds a strong value loop. The more subscribers use your service, the more they recognize its worth. That recognition leads to loyalty, referrals, and ultimately, retention.
A prime example of this is Twitch, which has introduced features like chat highlights and cues to help streamers identify key messages and engage more effectively with their audience. The platform has even experimented with a “follow cue,” which leverages real-time data to suggest the best moments for streamers to remind viewers to follow their channel — turning passive viewers into active community members.
Our tips to boost usage:
- Personalization: Use AI and data analytics to deliver tailored content or product recommendations.
- Regular touch points: Maintain frequent contact through newsletters, progress updates, or reminders about underutilized features.
- Milestone rewards: Celebrate subscriber milestones, like their first month or 100th login.
- Exclusive perks: Offer special content, early access, or VIP benefits for long-term subscribers.
- Community engagement: Create forums, social groups, or live events to encourage interaction and brand advocacy.
- Gamification: Introduce achievements, badges, or rewards for continued usage.
RECURLY IN ACTION
Subscriber engagement starts with understanding what drives it. With Recurly’s advanced analytics, you can track essential engagement metrics — like active usage rates and underutilized features — so you can act quickly. With built-in benchmark comparisons against thousands of subscription companies, you’ll gain actionable insights into what keeps your subscribers engaged. Plus, Recurly’s robust dashboards and reports provide real-time visibility into your most key performance metrics, allowing you to refine customer journeys with prompts or user flows, proactively mitigate churn, and make bold, informed decisions that fuel long-term success.
3. Foster personalized connections
Subscribers stay longer when they feel a genuine connection to your brand. Personalization goes beyond just product recommendations — it fosters a sense of belonging and loyalty. Subscription businesses that create spaces for subscribers to engage with one another, share experiences, and interact with brand representatives build deeper emotional connections, making it less likely that customers will churn.
One effective way to foster these relationships is by developing exclusive subscriber communities — popularly called “microcommunities” — where members can network, discuss topics relevant to their interests, and gain special access to content or events. Additionally, personalized communication through segmented email campaigns and customized in-app messages ensures subscribers receive relevant and timely interactions that enhance their experience. Finally, offering direct interaction opportunities, such as Q&A sessions or live events with brand leaders, gives subscribers a voice, reinforcing their importance and investment in the brand.
RECURLY IN ACTION
With Recurly Compass, you’re equipped with a powerful suite of AI-driven tools designed to drive engagement, retention, and revenue growth. By analyzing billions of subscription interactions, Compass delivers deep, proactive insights into subscriber behavior, identifying opportunities to enhance loyalty and reduce churn. With AI-powered recommendations, you can craft highly targeted offers, optimize subscriber journeys, and implement data-backed retention strategies with precision.
Merchant spotlight: MarketMuse
MarketMuse, a fast-growing SaaS company, knew that subscriber acquisition wasn’t just about getting people through the door — it was about engaging them from day one. With Recurly’s flexible promotions and subscription management, MarketMuse turned its promotional strategy into a powerful tool for long-term growth.
With Recurly, MarketMuse could implement promotional campaigns, offering partner and website-exclusive discounts through easily shareable promo codes. This replaced their previously cumbersome manual validation process, creating a smooth, ecommerce-like experience for subscribers. MarketMuse also experimented with free trials and discounts, discovering that a well-timed signup offer resulted in lower churn rates and a faster time-to-value for new users.
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