Best practices for cross-selling with subscriptions

The methods for increasing bookings can be reduced to 2 cases:

• Increase the number of subscribers while maintaining the price paid by the customer
• Increase the ASP (Average Selling Price) while maintaining the retention rate unchanged

To increase the ASP, there are 2 options. One is to increase the price of subscriptions, the other is to sell something extra to subscribers, this is cross-selling.

1. Cross-selling is effective with subscribers

Subscribers know the brand and products, and they are usually satisfied as they haven’t canceled. These are highly qualified prospects.

In addition, the subscription includes the idea of permanence of a service; the relationship is part of the customer experience throughout the duration of the subscription*. Thus, each interaction is an opportunity to propose cross-sell offers*.

Regular interactions with qualified prospects maximize the chances of conversion.

2. Types and opportunities of cross-selling

There are 2 types of cross-selling:

1. Subscription cross-selling: this is a subscription in addition to the main subscription and which renews.
2. One-shot cross-selling: it’s paid once, there’s no renewal.

One-shot cross-selling increases the price paid by the customer temporarily. Subscription cross-selling increases the price permanently or until the cross-selling is canceled.

3. Best practices

a. Best practice Timing-wise

Each interaction with the customer is a cross-selling opportunity. However, it’s important to proceed it wisely.

• Initial Acquisition: the customer should not be distracted before the initial purchase is validated. If you absolutely want to add a cross-sell, a post-purchase cross-sell is the best option.
• Renewal: it’s better to avoid interactions that could result in a refund. If you absolutely want to add a cross-sell in a communication (e.g. payment confirmation email), you will need to provide a version with for subscribers who are Marketing Opt-In and a version without for Opt-Outs.
• Mid-life: i.e. between Acquisition and Renewal. This is the best moment to include cross-sell offers during communications* (email, in-app notification), during interactions with customer service (on the phone, web) or during a visit to the website or using of an app.

b. Best practice Sales-wise

• If you want to increase your ASP in the long term, it’s better to sell cross-sell subscriptions.
• Any price increase can reduce the retention rate. Ideally, the cross-sell price should represents a non-major increase in the total cost of the renewal.
• If product A + Cross-sell B is equivalent to product C, then the price of Cross-sell B must be aligned to make the prices consistent.

c. Best practice Technically-wise

• The cross-sell subscription must end at the same time as the main subscription. i.e. When customer has 3 months left of subscription, the cross-sell is sold for the remaining 3 months. 
• All subscriptions renew at the same time.
• Renewal communications (Renew Alert and Renewal Confirmation) must be combined for the main subscription and its cross-sell.
• Each subscription can be cancelled independently
• If we offer months of free subscription to a subscriber (e.g. commercial gesture from Customer Service), then we must stagger the expiration dates of his main subscription and his cross-sell.

d. For greater efficiency

We offer cross-sells:

• To customers who have up-to-date billing data (e.g. non-expired debit/credit card)
• To customers who are the least price-sensitive (we avoid entry-level products)
• To the most loyal customers (customers who have a long tenure)
• At the right time: e.g. a subscriber tries to stream on 3 devices while their VOD subscription only authorizes 2. Then it’s the right time to offer a cross-sell to authorize a third device.
• Only if the offer is relevant to the subscriber. e.g. if my customer uses an iPhone, I do not offer them Android products.

Key Takeaways

1. Subscribers make a qualified audience for cross-sell sales. It is wise to subtly include cross-sell offers everywhere in the customer journey.
2. All subscriptions of a subscriber are co-terminated: it’s better to align the expiration dates of the subscriptions to avoid the subscriber having to renew multiple times in the year or month.
3. It’s necessary to monitor the impact of the presence of the cross-sell on the retention rate of the main product in order to validate the relevance of the offer in the long term.

*: in compliance with the rules of “Marketing opt-in” consent as required by GDPR.