The Difference Between Product Sales and Subscription Marketing

Subscription marketing for renewable services requires a dramatically different mentality than selling products.

In today’s subscription-minded economy, you’re increasingly likely to find yourself in customer renewal conversations.

Just as your message must change in renewal situations, your mentality must also dramatically differ when selling renewable services versus products. Underappreciation of these realities is one of the most common pitfalls we see in sales teams facing subscription marketing on a regular basis.

Three Things New Service Contracts Should Trigger

When selling products, it’s all about the transaction and getting them to buy the product. Once they do, ownership transfers to your customer, you celebrate, it’s done.

When selling subscriptions and renewable services, it’s all about getting adoption. You’ve got to develop the sense that you’re in it together because, with renewable services, your customer is no longer absorbing all the risk. Instead, you now live with the ever-present threat that they’ll leave.

When subscribers initiate a contract, it should trigger three things in your relationship:

• Your core metric is to ensure they stay and renew the contract.
  You’ve got to sell a lot more when attrition rates are high. As a result, it’s critical to recognize you have a vested interest in your customer’s success so they renew the contract. Return customers also tend to buy more over time, refer you to others, advocate for your brand, and even pay a premium to stay with you rather than switch to an unfamiliar competitor.
• Your future opportunities at that account now pivot on the success of the initial deployment.
  If your customer doesn’t see the value, not only will they not renew, they’re not going to add users or locations or units either. Whatever the initial subscription, there are usually remaining whitespace opportunities within new accounts. Since new subscribers typically don’t go ‘all in’ on day one, it’s critical you get it right from day one.
• Your ultimate goal is now for your customer to help get the message out.
  Positive word of mouth creates a viral effect. If you don’t have customers willing to talk about how your services have transformed their business, you won’t reap one of the prime benefits of a successful initial deployment. You could be the best sales professional in the world, but absent reference-able subscribers, everything else is just an unsubstantiated promise.

When selling renewable services, you can’t take customers for granted. Their success is your success, and fully appreciating that requires a different, subscription-minded mentality. If you can ramp up a compelling customer retention story and give your sales team the skills they need to tell that story effectively in the field, you’ll be in a strong position to perform well against your core customer success metric—reducing churn. If you’re hitting your numbers, you have the potential to create a hugely positive ripple effect across your organization.

Want original academic research exploring how to tell the most effective customer retention story? Check out our State of the Conversation Report.