Case Studies

Subscriber Lifecycle: A Reimagined Customer Relationship

What does the customer want today? This question may seem basic, yet it is crucial for all companies, regardless of their size or sector.

April 23, 2020

12 min read

The Evolution of Customer Expectations: Towards an Access Economy

What does the customer want today? This question may seem basic, yet it is crucial for all companies, regardless of their size or sector.

It carries the essential challenge of modern retail: how to place the customer at the center of thinking about your business model? How to provide them with tailored value in a constantly evolving digital environment?

Major behavioral shift

In recent years, a significant shift in consumer behavior has emerged. Today's consumer primarily seeks access to a positive experience that fully meets their needs.

They no longer need to own a product; what matters is accessing a solution. This fundamental transformation redefines the codes of traditional commerce.

Thus, customers find value in the product usage experience. Ownership is no longer sacred and has become rather a constraint for many goods.

This evolution is explained by several key factors:

Environmental impact: consumers favor sustainability
Financial flexibility: avoiding large initial investments
Rapid technological evolution: accessing latest innovations without obsolescence
Simplicity of use: delegating maintenance and updates

The Explosion of the Subscription Market in Numbers

This behavioral transformation explains the exponential growth of the subscription market: 100% between 2013 and 2018.

The projected average annual growth is 9.8% over the next ten years worldwide.

By 2023, 75% of companies with direct sales points will offer subscription services.

Global subscription commerce already represents 18% of the market. 59% of consumers in high-growth markets are interested in replenishment based on subscription preferences.

Key Indicator	Value	Period
Subscription market growth	+100%	2013-2018
Projected annual growth	9.8%	Next 10 years
Retail companies with subscription	75%	By 2023
Share of global commerce	18%	Current
Consumers interested in replenishment	59%	High-growth markets

Strategic opportunity

Thus, the transition to subscription-based business model has become a preferred path for any company seeking to accelerate its growth, maximize its cash flow, and increase its value.

Digitalization and omnipresent interactivity have given every company a reason to think about their customers in terms of continuous revenue streams rather than individual and unique purchases.

This approach revolutionizes logistics flow management and requires a complete overhaul of traditional commerce processes.

Consequently, the customer lifecycle takes on an entirely new importance. Companies must now optimize:

Customer Lifetime Value (LTV) over the long term
Retention rates and continuous satisfaction
User experience at every touchpoint
Personalization of offers and services

Subscription: Creating Tailored Value

The value provided is not equal to the product itself. This fundamental distinction transforms how companies design their offering.

Today, customers find value in the product usage experience rather than in its simple possession. This behavioral evolution redefines market expectations.

This is why companies are gradually evolving their business models to enable flexible monetization of experiences. This transformation is particularly accelerating in the retail and tech sectors.

Evolution of economic models

Subscription models represent a direct response to growing consumer demand for flexibility and personalization. They allow companies to create recurring revenue streams while offering continuous value.

Subscription models today allow personalizing the customer relationship and creating a lasting relationship. This approach transforms the one-time transaction into a long-term commitment.

These models are flexible and can take several forms to better target customers and meet their specific needs. The diversity of approaches allows fine adaptation to different market segments.

The 5 Types of Subscriptions to Maximize Customer Value

Subscription Type	Description	Advantages	Example	Application Sector
Standard	Fixed-price product/service, billed recurrently	• Revenue prediction • Easy implementation • Customer simplicity	Spotify - monthly streaming subscription	Media, basic SaaS
Per user	Variable price based on number of users	• Cost predictability • Scalable offering • Growth with customer	Microsoft 365	Enterprise software
Usage-based	Price based on actual consumption	• Customizable billing • Upselling opportunities • Pricing fairness	Car rental "pay as you drive"	Mobility, Cloud computing
Mixed	Variable price based on included options	• Maximum flexibility • Multi-service integration • Needs adaptation	Gymlib - gym subscription	Lifestyle services
Custom	Fully personalized offering (Quote to Cash)	• Custom contracts • Adapted pricing • Strong differentiation	Enki (Leroy Merlin) - connected solution	Complex B2B, IoT

Advanced personalization

Custom subscription allows developing "à la carte" contracts that meet each customer's specific needs. Leroy Merlin's Enki solution perfectly illustrates this approach with a personalized composition of connected home services, integrating digital and physical services.

Criteria for Choosing the Optimal Subscription Model

The choice of subscription type depends on several critical factors:

Product-related factors:

Technical complexity of the product or service
Expected usage frequency
Customization possibilities
Development and maintenance costs

Market-related factors:

Customer segment maturity
Existing consumption habits
Competition level
Sector regulations

Company-related factors:

Customer flow management capacity
Available technical infrastructure
Commercial and marketing resources
Short and long-term growth objectives

Key considerations

Implementing a subscription model requires profound organizational transformation. Teams must be trained in long-term customer relationship management, and information systems adapted to manage recurrence and personalization.

Impact on the Value Chain

Adopting a subscription model transforms the company's entire value chain:

At the commercial level: Sales becomes a continuous engagement process rather than a one-time transaction. Sales teams must develop account management and retention skills.

At the operational level: Logistics and distribution processes adapt to manage recurring and personalized deliveries. This evolution often requires overhauling management systems.

At the financial level: Revenue recognition spreads over time, modifying performance metrics. Traditional indicators give way to specific KPIs like Customer Lifetime Value (CLV) and churn rate.

Key metrics to track

Monthly Recurring Revenue (MRR): Monthly recurring revenue
Customer Acquisition Cost (CAC): Customer acquisition cost
Churn Rate: Monthly attrition rate
Net Promoter Score (NPS): Customer satisfaction and recommendation

This transformation toward subscription is part of a broader logic of usage economy, where subscription becomes a strategic lever for differentiation and sustainable value creation.

Subscription Lifecycle: Priority on Customer Experience

The subscription model completely modifies customer relationships. It enables establishing a continuous relationship with the customer and building long-term loyalty.

Reflection on the cost of acquiring new prospects gradually transforms into overall financial reflection on providing a better quality customer experience. This approach allows retaining and sustaining each customer over time.

Key differentiation point

Customer experience is at the heart of subscriber lifecycle management. From the moment subscription meets the need to use the product rather than buy it, a subscriber's lifecycle is radically different from a classic customer lifecycle.

Subscription success implies monetizing relationships. This approach requires fine understanding of customer needs and constant adaptation of the offering.

There are 7 stages of the subscriber lifecycle. Each phase of the lifecycle is centered on retention and customer satisfaction, creating a sustainable ecosystem of mutual growth.

The 7 Stages of the Subscriber Lifecycle

Stage	Description	Primary Objective	Business Impact
1. Offer creation	Subscription design (weekly, monthly, quarterly, annual)	Precisely meet identified needs	Initial acquisition
2. Personalization	Adaptation based on available customer data	Maximize offer relevance	Improved conversion rate
3. Flexible payment	Adapted billing (fixed, usage, users)	Facilitate adoption	Reduced friction
4. Pause management	Ability to temporarily suspend	Reduce unsubscription rate	Customer retention
5. Offer evolution	Upgrade/downgrade based on customer maturity	Optimize customer value	Increased LTV
6. Offer modification	Adding or modifying subscriptions	Prevent dissatisfaction	Enhanced loyalty
7. Renewal	Automatic renewal	Efficient retention	Recurring revenue

Critical Stage Details

Stage 1: Creating a subscription offer

Defining periodicity (weekly, monthly, quarterly, annual)
Precise identification of the need the offer must address
Competitive analysis and pricing positioning

Stage 2: Personalization The offer can be personalized based on available customer data. This personalization relies on:

Navigation and purchase history
Declared preferences
Observed usage behaviors
Demographic and behavioral segmentation

Stage 3: Payment The payment system is based on billing flexibility:

Fixed billing: constant amount regardless of usage
Usage-based billing: cost proportional to consumption
Per-user billing: pricing based on number of active users
Hybrid models: combination of several approaches

Stage 4: Pause User retention assumes giving them the possibility to pause their subscription when they wish. This stage can considerably reduce the unsubscription rate.

Benefits of pause functionality

Churn reduction: up to 30% decrease in unsubscription rate
Relationship maintenance: customer stays in the ecosystem
Behavioral data: understanding usage cycles
Reactivation opportunity: targeted return campaigns

Stage 5: Upgrade and downgrade At this subscription stage, the user has gained maturity. This is the strategic moment to offer:

Additional offering adapted to their new needs
An upgrade to a premium formula
A temporary downgrade to avoid cancellation
Personalized complementary services

Stage 6: Offer modification The ability to modify the subscription offer or add another subscription offer significantly reduces the risk of dissatisfaction. This flexibility includes:

Adding complementary modules
Modifying usage conditions
Adapting included volumes
Customizing features

Stage 7: Automatic renewal Automatic renewal constitutes a particularly effective retention method. It requires:

Transparent communication about conditions
Prior notifications before renewal
Possibility of modification before renewal
Simplified opt-out process to maintain trust

Virtuous cycle of customer knowledge

The subscriber journey is a virtuous cycle: it increases customer knowledge and develops a unique customer relationship. Each stage of the cycle is an opportunity to add value and strengthen engagement.

Continuous Lifecycle Optimization

Analyzing data from the customer journey allows going even further in personalization and customer knowledge. This data-driven approach allows further refining segmentation and optimizing each touchpoint.

Leading companies in the subscription sector invest massively in:

Predictive analytics to anticipate churn behaviors
Marketing automation to personalize communications
Artificial intelligence to optimize recommendations
Subscription management platforms to streamline experience

Key metrics to monitor

Conversion rate from prospects to subscribers
Customer Lifetime Value (CLV) by segment
Monthly churn rate and its triggering factors
Net Promoter Score (NPS) of active subscribers
Upgrade/downgrade rate by cohort

This holistic approach to lifecycle fundamentally transforms the commercial relationship, moving from transactional logic to sustainable and mutually beneficial relational logic.