This Is Seriously Plaguing Your Retention

Abby Sullivan Mar 2 2020

Today, we start with a cup of coffee. Then we look at the opportunity to raise your product prices. (When is it OK?) And to wrap… your credit cards might be failing.


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Waking up with subscription 

Think about it: How many times a week do you buy coffee?

Grace says she's a four-to-five-times a week gal. And that can add up quickly. But takeout coffee is kind of a novelty in its own right. And there's a new subscription in town that may actually satisfy your daily caffeine kick while also saving your wallet.

Panera has launched a monthly coffee subscription program with bottomless cups of caffeine (or decaffeinated, if you so choose).

Bottomless coffee is a huge deal—especially when it’s priced at $8.99 a month (even cheaper than buying a pound of ground beans at the store). Essentially, it's a steal—with an average cup at Panera hitting close to $3.

And Panera's offering you access to the subscription, beginning today, as long as you’re a member of Panera’s free loyalty program—all of which seems fantastic, but potentially too good to be true.

This is feeling reminiscent of the MoviePass saga (which we devotedly followed on previous episodes of the show). We know MoviePass had a great idea. The company tried out the subscription model, in more ways than one, but the model was not executed in a sustainable way

Although, according to Business Insider, Panera tested this out at 150 restaurants, and in most cases, customers also purchased food when coming to get their cup of joe—so the upsell opportunity is pretty solid. Additionally, the company saw a 90% renewal rate and a 25% increase in loyalty members. So perhaps Panera isn’t doomed like our old pal MoviePass.

And in expanding past the consideration of the revenue model, a lot of it also comes down to loyalty. We know building brand loyalty is crucial to your product’s success. It may just be in Panera’s best interest to focus on resonance over reach right now. Brand awareness is just one piece of a much bigger puzzle. Getting people to have affinity for your brand —actually recommending your products or services to their people — could be a worthier investment for your 2020.

If interested, here are some solid resources on brand loyalty and NPS:

We’ll have to sit tight and see what happens. Either way, this is proof that more companies are getting their toes wet with the recurring revenue model because they realize: Subscription is the future. 


The value-based pricing zone

As this past year kicked off, we witnessed DAZN—the sports streaming service that’s increasingly killing it in this space—with thoughts of doubling its pricing offerings for users.

In November, DAZN had raised its subscribership to eight million globally, which is nothing to scoff at. But, is this number alone grounds for raising their prices? That’s what got us thinking. When, in terms of the success of your product, is it OK to alter your pricing?

Ultimately, it’s hugely about the value you’re providing your customer with the goldmine: value-based pricing.

Value-based pricing could easily be called “customer-based pricing” because that’s essentially what it is. The more formal definition describes value-based pricing as basing a product or service’s price on how much the target consumers believe it’s worth. Instead of looking inwardly at your company or laterally toward competitors, value-based pricing gives you an outward look.

We love value-based pricing, and for three good reasons. You can price higher than your competitors because you’re basing the pricing off of what customers say they’re willing to pay.

Value-based pricing also makes improving your product a continual process. Pricing is more than just a dollar sign on your website. It includes packaging and how you offer features. Knowing what your customers value at all times will make evolving your product and features an absolute must.

Finally, since your customers are determining product value, you need to communicate with them quite a bit. You’re building trust and this trust can lead to good things down the road, like higher retention and less churn.

So, who is value-based pricing good for? What are the benefits? Are there downsides? What are some companies doing well? (This show isn’t nearly long enough for me to get into all of these details—today, that is. So I'm linking to extended resources below if you're intrigued.)


Burn churn that's coming from CC failures

Delinquent churn, at its core, refers to credit card failures and how they impact your retention. Spoiler alert: it’s a significant impact.

So our team is joining forces with the Subscription Trade Association, or SUBTA, to get down to brass tacks on this issue that’s seriously plaguing your retention strategy.

But why would you want to listen to us when it comes to churn?

SUBTA Chariman and Co-Founder Chris George, plus our very own pricing pro Patrick Campbell, are kind of obsessed with this. At ProfitWell, we’ve collected the largest churn data set in the world with data from 17,234 companies, while SUBTA stands as the leader in building solutions and partnerships to support subscription ecommerce business growth. 

And we're here to share insights on where and why subscription ecommerce companies are failing at properly pinpointing and addressing involuntary churn—plus benchmarks on delinquent churn and CC failures, a framework for understanding active churn vs. delinquent, insights on how to tackle it, and simple tweaks for boosting your revenue.

It’s all going down this Thursday, and space is limited so be sure to snag your spot. (Bring your burning questions.)

And that’s it for your March 2 episode of Recur Now. If you have news to share or input on any topic we hit, don't hesitate to reach out to me at

This has been a Recur Studios production—the fastest-growing subscription network out there. If you find use for this show, subscribe for more like it at


By Abby Sullivan

Content Marketer

Subscription market insights you won't find anywhere else.