You subscribed to Netflix because you like to be entertained.
Next came Spotify for your music, HelloFresh for your dinner plans and Apple Fitness for your physical health. Before you realized it, you were spending $50, $100, or perhaps even more every month.
Subscription fatigue is a real thing, it’s not your imagination. Subscription business models have transformed industries but they’ve also given rise to increasing consumer frustration.
Let’s dig into this and see how businesses can improve sales.
What Is Subscription Fatigue? (And Why Should You Care?)
You’re suffering from subscription fatigue – the feeling of being inundated with too many monthly subscriptions. It’s as if you have a closet full of clothes and nothing to wear, only instead of clothes, it’s bills.
Even each subscription feels small but they add up quickly.
The average person now has 12 active subscriptions at any one time, according to recent studies. That includes streaming services such as Disney+, as well as productivity apps such as Adobe Creative Cloud.
These costs might total anywhere from an extra $5 to $20 a month, on an individual basis. But collectively? They might cost you hundreds – or thousands – of dollars a year.
The issues do not stop there. The hassle of managing multiple accounts, keeping track of renewal dates and unraveling wacky pricing tiers adds to the stress. Throw in climbing prices and lousy customer service, and all of a sudden, you’re considering canceling everything and going back to the retail model of buying things outright.
That is why it is so difficult for businesses. Increasing churn, sluggish growth and declining brand loyalty are all signs of subscription fatigue. In summary, companies that do not learn new ways of doing business are in danger of losing customers – and profits – en masse.
Subscription Fatigue and The Business Impact
Rising Churn Rates
Here’s a tough statistic: 67% of consumers have canceled at least one subscription in the last year, and fatigue is the primary reason why.
Just think about that for a moment. Two-thirds of the audience that could have been yours, and now isn’t, has walked away because they don’t want another bill. For subscription businesses, this leads to increased turnover and unpredictable revenue streams.
Slowing Growth
Remember when it was exciting to sign up for a subscription? Those days are fading fast. The rate at which the number of new digital subscriptions grew fell by 15 percent in 2023 compared with the year before. Consumers are getting more selective, choosing only services they really want or love.
It’s Getting More Expensive to Acquire Customers
As people get leery of subscriptions, getting new customers is pricier. Ad spend goes up, conversion rates fall and marketing teams work overtime to come up with new ways to break through the cluttered market.
Brand Loyalty Erosion
When businesses make it hard to cancel – or, worse, nickel-and-dime their users – they destroy trust. Negative experiences result in poor reviews, social media attacks and a long-lasting hit to a business’s reputation.
Why Are You Feeling So Tired?
Sheer Volume
It feels like almost every kind of business is getting in on the subscription act. Need groceries? There is a subscription for that.
Want car features? Yup, you’re going to have to pay a monthly fee. So many of them, in fact, that decision fatigue overwhelms the process of picking between ten slightly different options.
Cost Accumulation
Small fees add up quickly. A $10 app here, a $15 workout program there – it doesn’t seem like a lot until you realize you’re somehow spending upwards of $100. And lots of services also raise price once they’ve hooked you, with many raising them year after year.
Perceived Value Decline
Not all subscriptions offer consistent value. If you’re shelling out for three streaming services but using only one on a regular basis, the others can start to seem like a waste. As new rivals arise, customers wonder if each service is worth holding on to.
Complex Management
Multiple logins, billing cycles, and renewal dates: That’s a headache. Miss an email reminder of a payment, and suddenly you’re staring at an unwelcome charge for another unwanted month.
Difficulty Canceling
Some companies do actually design cancellation to be painful. There is nothing more infuriating than hidden menus, long phone calls, or coerced surveys that put barriers between us and cancellation. When the pain of leaving exceeds the pain of staying, the resentment builds – and the trust erodes.
Subscription Fatigue in Real Life
Streaming Services
The streaming wars demonstrate subscription fatigue in action. Recall when Netflix was the only game in town?
Now, you have Disney+, Hulu, Amazon Prime Video, HBO Max, Paramount+, Peacock – and on and on.
A growing number of consumers are increasingly “stacking” multiple services so they can see the few shows they want, but canceling or rotating them out of their roster each month to save money.
In a countermove, Netflix rolled out an ad-supported tier in 2022 aimed at adding more price-sensitive viewers. Though controversial, it underscores how companies need to innovate if they are to remain competitive.
Automotive Features
BMW caused outrage when it recently said it would charge monthly fees for features like heated seats and steering wheels – which were already built into the car.
Why should customers have to pay for something they thought was already theirs?
Digital News and Publishing
When publishers are grappling with cancellations, The New York Times has had success with bundling.
The thinking was that, by bundling core news products with niche products like Wirecutter and The Athletic, they could construct a package that felt valuable enough to command such high prices. Their strategy proved successful: Digital subscription revenue hit $1 billion in 2023.
How Companies Can Push Back Against Subscription Overload
The old playbook for subscription-based businesses is history. To fight fatigue, you need to consider a new strategy:
Deliver Genuine Value
If you give people something that they can see that benefits them, they’re going to hang around.
Look at a cycle of continuous improvement, innovation that gets results. Think about add-on’s to increase the perceived value. For example, a fitness app may connect workouts with nutrition information or mental health resources.
Provide Flexibility and Transparency
Ensure customers can easily pause, reduce the size of or cancel their subscriptions. Most customers expect this flexibility and not offering it will send them directly to your competitor. Be clear about how much your service costs, when it renews, and what’s included in each tier. No surprises.
Personalize the Experience
Leverage data to know your customers better. For instance, if someone does use your service often, send them a personalized discount or simplified plan to keep their business. If you need to improve customer retention, proactive outreach creates good will and decreases churn.
Simplify Management
Build easy on-boarding dashboards that make it simple for customers to see all of their subscriptions in one place. Remind customers in advance of renewals or price hikes to build trust. The more convenient you make it for someone to manage their accounts, the better.
Innovate on Pricing Models
Try more creative pricing models like pay-per-use or freemium. More affordable price points appeal to cautious buyers, while high-end segments cater to power users. Netflix with ads is an excellent model of adapting to consumer demands.
Make Cancellation Easy
Yes, you read that right. It may sound counterintuitive to make cancellation quick, but it increases trust. Regulators including the F.T.C. are calling for “click-to-cancel” regulations guaranteeing customers the ability to leave as easily as they joined. A smooth exit encourages re-subscription in the future.
Final Thoughts
The subscription economy is here to stay – but it is changing. There is a danger that businesses which refuse to modernize could find they have driven away their audiences. Meanwhile, those that adopt empathy, transparency and innovation will succeed.
Focus on customer in order to thrive in this rapidly changing terrain. Ask yourself: Does our product solve a real problem? Am I providing genuine value? Is this a service I would use?
