Before digging into the details, let’s start with the basics. What do we mean by subscription-based services? The answer is simple. As its name suggests, a subscription-based service describes any type of customer-related service that works specifically within a business model based on recurring fees. That can include:

• Customer service inquiries for subscription-based products and services.
• Processing cancellations for subscriptions.
• Solving issues that could otherwise lead to cancellations in order to reduce churn.
• Processing of payment methods and change of methods.
• Cross-selling and upselling to higher subscription tiers.

A subscription-based service agent is one that understands the importance of every single customer interaction. A bad experience doesn’t just lead to less brand loyalty; in this business model, it’s directly related to a loss of recurring revenue. Engaging and satisfying both new and recurring customers is therefore a top-tier customer service priority.

So much for the basics. But what does that look like in the real world? Subscriptions, and business models relying on recurring revenue, can come in a number of shapes and variations. Here, we’ll discuss four of the most common ones, and the type of service they require.

In many ways, SaaS (short for software as a service) is the original digital subscription model. It describes any software for which the user, instead of paying a one-time price, pays monthly to keep the license for its use. Microsoft Office is a great example of this process. Originally available for a one-time fee, the tech giant moved to a subscription-based model with its Office 365 suite in 2011. Now, anyone looking to use its MS Word, Excel, or PowerPoint products will need to pay a monthly fee. Other examples include plug-ins like Grammarly, fitness mobile apps, and more. Customer service for this type of subscription revolves around usability. Customers will frequently have questions and problems with how to use the software, along with technical issues. White glove customer service, focusing on finding solutions quickly and putting the customer first, is absolutely essential here.

Anyone listening to podcasts will be familiar with these types of subscriptions. For a monthly fee, you’ll get a box of goods in a particular focus area. Think Chewy for your dog, prescription medicine, or more niche topics like Sips by Tea (Tea of the Month) or German Food Box. This type of subscription differs from software because of its tangibility. The products, though shipped on a regular schedule, are as physical as they’d be in a supermarket. Subscription-based services need to include in-depth product expertise, but also general knowledge about the topic at hand. Moreover, at least part of this delivery mechanism is out of the business’s hands. Delays or damages in shipping may cause upset customers. Again, a white glove operation that places concerns first becomes vital. The lost revenue of sending a replacement box is well worth avoiding churn due to an angry subscriber.

While traditionally a one-time purchase revenue model, ecommerce has become increasingly subscription-based as well. Think Amazon, which has begun to offer recurring deliveries for many of its convenience products. Similarly, electronics companies like HP, through its Smart Ink program, now offer subscription options as well. Customer service for this type of subscription model to the boxes above. Physical shipping delays or issues need to be part of agent training. At the same time, the generally lower value of recurring pages also allows agents to cross-sell and upsell with the right training, providing an opportunity for increased revenue as subscriptions become more profitable over time.

The final type of popular subscription model is a content marketplace. We’re all familiar with them and subscribe to at least one. Pay a regular fee to Netflix, Spotify, or Disney+, and you get content like TV shows, music, and movies to consume for as long as you’re current on your fees. A slightly different, but still closely related business model is one like Amazon Prime, which offers a different type of accessibility through its two-day shipping option. The basic idea is still the same: you get a non-tangible benefit, but one that will still help you achieve your goals in very specific ways. The more abstract nature of these subscriptions makes customer service an important component of the business model. Agents have to be highly trained in its specifics, and the business model itself has to operate on minimum downtime and maximum reliability. Any service interaction that doesn’t result in one-touch resolution has the potential to lose the subscriber.

While the above four business types tend to account for most subscription emphases, it’s important to understand just how popular this business model has become. Done right, more reliable revenue streams can benefit anyone from startups to Fortune 500 companies. Above all, that’s because buyers are looking for them. According to research firm McKinsey, 49% of shoppers are currently using at least some type of subscription service. It’s not just the traditional examples mentioned above, either. The car subscription market, for instance, is set to grow by more than 70% by the end of next year. Meanwhile, 70% of business leaders say that subscription models will be key to their prospects in the years ahead. Regardless of the type of subscription, consumers and business buyers alike tend to appreciate this type of business model for a few core reasons:

• Convenience
• Cost
• Discovery

Let’s dig into each in a bit more detail.

If you’ve used a subscription in the past, there is little doubt: it adds a layer of convenience that one-time purchases typically can’t. Whether that’s watching Netflix on your mobile device, getting a box of your favorite food every month, or saving your documents in the cloud for Office 365, it’s much easier than having to pay for all of those items individually. In many ways, these subscriptions are specifically designed for that convenience. If the business model is built to help your customers make their lives easier, they’ll be willing to pay a monthly fee for it. That’s especially true if they can trust in the customer service piece of the equation being top-notch.

One-time licensing fees, for any of the above service and product types, also come with high fees. Anyone who remembers purchasing pre-365 versions of MS Office or Adobe Creative Suite can attest to that. In subscription models, on the other hand, the low monthly cost is much easier to stomach and account for. This in turn, has an important implication on the customer-business relationship. A customer who doesn’t see value in their subscription can simply drop it, long before they get to a revenue-neutral point. Value over time, and fast problem resolution, has to be a major priority.

The final reason customers gravitate towards subscription businesses are the opportunity to discover new things, at a low incremental cost. A user who signed onto Netflix for a few specific TV shows, for instance, will be happy to browse its increasing library. Subscription box customers can try new products at a given time without having to purchase in bulk. This tendency to discovery also changes the customer-business relationship. Smart companies are able to provide relevant recommendations to encourage exploration, both to maintain high engagement and leverage potential upsells and cross-sells. The continual discovery opportunities also build longer engagement and subscription times, reducing churn in the process.

Put it all together, and you get a business model that is rapidly gaining popularity across industries and customer types. At the same time, the specific reasons why it’s gaining so much popularity also add stress to customer service, which has to be top-notch to keep engaging and satisfying new and recurring subscribers. That’s not always easy to achieve. It requires comprehensive knowledge of the nuances within various types of subscriptions, along with an emphasis on white glove customer service that meets your audience where they expect to be met. Building out an internal team to manage it all can be challenging and resource-intensive. In many situations, outsourcing these services tends to make more sense. Through outsourcing, your organization increases its flexibility. It comes with potentially significant advantages, including the ability to cut business costs in multiple ways without losing service quality. The customer retention benefits of call centers are especially relevant for subscription-based services, which rely heavily on keeping customers long-term to gain profitability. Of course, it’s not just about outsourcing your subscription-based services and calling it a day. You have to find the right partner, one that can help you accomplish your customer service needs in a variety of ways. That partner should fit a few core criteria to truly help you build a successful subscription-based service model.

Naturally, any outsourced contact center needs to be deeply familiar with this business model. The unique service needs outlined throughout this post should be in every agent’s DNA.

Immersion into your brand matters as much as immersion into your business model. Your brand’s personality, tone, and of course your product details and benefits should shine through in every interaction with your subscribers.

Can the service agents keep your subscribers informed at every turn? Can they communicate about upcoming renewal dates gently but firmly? How can they engage your customers through account upgrades or cross-selling opportunities, without becoming annoying? Engagement will also matter in more functional processes like payment processing or cancellations.

It’s not enough for subscription-based services to solve problems. The subscriber, at all times, should feel like royalty, like their needs are met at every turn without even a question. That type of empathetic customer service can make all the difference in a recurring revenue model relying on value and customer happiness.

Your subscribers may call about any issues, from shipping concerns to address changes and complex product service issues. At other times, you might need to call them to update payment automation or remind them of an expiring subscription. Are your agents prepared for this dual task? And are they knowledgeable enough about both product and processes to get it done right?

Don’t make your subscribers choose your preferred service channel to get an answer or solve a problem. A question asked on social media is just as important as one posed via email or a direct phone call. The best partners offer multi-channel customer service, meeting your subscribers where they are instead of making them come to you. In short, you need to choose right. The success of your recurring revenue model depends on it. But if you do know how to choose a white glove call center that helps your business succeed, you’ve put in place a foundational piece for business growth. That’s when your subscription-based services can do the heavy lifting as your subscriptions grow and your churn decreases.

Millennial’s subscription-based services employ highly trained agents to make the process of engaging customers via multiple communications channels and streamlining the subscription renewal and support process for your company. Increasing Customer Retention, from customer service inquiries to retention and cancellations, the Millennial team trains on your procedures to offer fast and friendly call center support. Every customer interaction is an opportunity to increase sales. We ensure that every caller gets personalized attention during each communication that keeps them coming back to renew their subscriptions. We provide subscription service support at cost-effective rates with US-based agents. If you have any questions about subscription-based services, contact Millennial Services today.