Customerland
Customerland is a podcast about …. Customers. How to get more of them. How to keep them. What makes them tick. We talk to the experts, the technologies and occasionally, actual people – you know, customers – to find out what they’re all about.So if you’re a CX pro, a loyalty marketer, a brand owner, an agency planner … if you’re a CRM & personalization geek, if you’re a customer service / CSAT / NPS nerd – you finally have a home.
Customerland
Retention Over Acquisition: The New Subscription Paradigm
The subscription economy is experiencing a profound transformation. What once centered entirely on acquisition has shifted dramatically toward retention as businesses recognize the true value of deepening customer relationships rather than constantly chasing new subscribers.
Lina Tonk, CMO at Recurly, explains this evolution with remarkable clarity: "When you start thinking about retention as a top metric instead of acquisition, you realize that you're getting close to the human that you're serving and the value that you're providing them." This perspective shift represents what she calls "a beautiful moment" in the subscription market—one that reconnects businesses with their fundamental purpose of serving people.
Data reveals the urgency behind this transformation. Acquisition rates have plummeted from 4% to 2.8%, forcing subscription businesses to rethink their growth strategies. The most successful companies now view this challenge as an opportunity to create what Tonk describes as "magical moments" with existing customers—personalized experiences that strengthen bonds and drive loyalty.
The conversation delves into practical approaches for building customer proximity. At Recurly, this starts at the executive level, with leadership actively participating in customer meetings and seeking direct feedback. Their executive program connects C-suite leaders with customers quarterly, not just for business reviews but to share insights from subscriber behavior data that can guide strategic decisions. This approach acknowledges that "customer experience is everybody's job," not just the responsibility of customer success managers.
Perhaps most fascinating is the evolving view of cancellations and pauses. "Cancellation isn't goodbye," Tonk emphasizes, noting that approximately 70% of subscribers would remain if offered a loyalty incentive. The option to pause subscriptions—whether for a month, three months, or longer—has become a powerful retention tool, creating pathways for customers to return on their own terms.
Want to build stronger subscriber relationships and drive sustainable growth? Listen now to discover how getting truly close to your customers can transform your subscription business. And stay tuned for future conversations exploring the intersection of customer experience, loyalty, and retention in greater depth.
When you start thinking about retention as a top metric instead of acquisition, you realize that you're getting close to the human that you're serving and the value that you're providing them, and to me, that is a full circle moment. That's when you connect with people, when you know that you're making a difference. That, to me, is a beautiful shift in the market.
Speaker 2:Today on Customer Land, lina Tonk, who is CMO at Recurly, and because you didn't have the privilege of spending the last 15 minutes just getting to know each other like we just did. This conversation is already going. There's momentum happening here, there's all kinds of passions that are on the table. But before we get into all that, lina, thank you so much for joining me. I really appreciate it.
Speaker 1:Yeah, no, thank you so much for having me. I feel like I know you so much in the last 15 minutes getting to know you and I have to explore so much more. We have so many things in common, but it's great to be here. I appreciate you having me.
Speaker 2:Thank you, thank you. So we both agreed a moment ago that the struggle here will be to keep this conversation on point. So we're just going to do this, we're just going to do it. So we're just going to do this, we're just going to do it. So, for context, for people who may not know, can you tell us about Recurly?
Speaker 1:What Recurly is, what they do, what's their offering and then your role there. Yeah, so I've been at Recurly for it's going to be about a year. We are in subscriptions, which is one of the most exciting markets I actually come from, so I've been in SaaS my whole entire career, but I come from HCM, so quite different but also accelerating, and I was actually personally looking for an industry that had a lot of possibilities and growth, which is what subscriptions has right now. There's at Recurly you know we have. It is truly how leading brands unlock revenue and how they get ahead.
Speaker 1:I've been so, so amazed by the possibilities of subscriptions. I think when I started in subscriptions and started reviewing the market and doing the research on the market even before joining Recurly, I couldn't believe the unlocking of the possibilities. But also the most interesting part of that is the the drive that subscribers actually, or the demand that subscribe subscribers are giving these customers what they're demanding of them. Um, which is and it has everything to do with experience so really exciting market. Um been on it for a year, learning, you know, along the way, but lots of shifts on the market too. I bet.
Speaker 1:They're behaving and, I think, a lot of our. If you were able to take a look at our subscriptions report, there's a lot of pretty interesting highlights there on possibilities. I think that what's exciting about subscriptions really is that is, the possibilities, the unlocking the possibilities within revenue. So, yeah, that's what we do. Recurly itself, the company itself, has been around for a bit now Very passionate, energized company now in the last couple of years we had pretty amazing last last year, 2024 was pretty big for us. So we've been on fast growth, fast growing in 2025. But one of the reasons we have been able to do that is we got really really close to to our customers um. We are really really close to what the needs are for them um in and that has given us the ability to grow at the pace as we're growing today.
Speaker 2:I have.
Speaker 1:now I have another 20 questions I have to figure out which ones to go with here.
Speaker 2:So first tell us a little bit about the verticals that recurly operates in, because you know there's a lot of subscription. I don't say full platforms out there and there are some, but you know there are a lot of people say they operate in subscriptions but it might be just this one little corner, or they might have this one application or they do a thing here, but it's not a kind of full-featured enveloping process.
Speaker 1:Yeah, actually, it's such a growing vertical market because when people think subscriptions, they think of streaming media immediately. To be honest, that's early days how I was even describing it to my own family Like mom what do you do? I'm still answering that question today. I've answered the same question for many, many years, but it's not uniquely to streaming media. Obviously, streaming media has had exploding growth. It had exploding growth through the pandemic, but also through the pandemic they had the ability to just see so many possibilities on what they could do and how creative they could get. But I mean, we're also talking digital publishing. Software, travel, health and wellness has become a pretty big one, one that we have seen kind of grow and explode in the last couple of months too.
Speaker 1:It's not new, but what is new about many our new rebrand is that you in subscriptions, you have two personas that you're going to run into. You have the, you have the, the all-time people that have been in subscriptions forever, have always done subscriptions, so they're subscription natives and they have a bunch of background on it. Then you have what we call the subscription newbies, and it is the ones that are like, hey, we could unlock some revenue through subscriptions. We're not really sure how we're going to do that, but maybe we'll find a company that will help us with like software and services through it. But we're just going to have to find our way and normally what we're seeing is a company will give that to a growth leader sometimes a previous marketing leader that is just going to unlock revenue for the company.
Speaker 1:So we see those two revenue for the company. So we see those two. And a lot of times it's so interesting because even the all-time people in subscriptions are still trying to unlock where the market's going. Years ago, a year ago, when I came in, all we talked about was acquisition. How do we acquire, acquire, acquire, acquire. That's all any meeting we will have with a customer. What's all about that? And if you look at some of the reports that we have put out there, which is like a tremendous amount of data, I mean we're talking about acquisition rates that have dropped from 4% to 2.8% Like that's a big drop.
Speaker 2:It's huge.
Speaker 1:It's a big drop. It's huge, it's a big drop. But also what I you know, when I talk to customers and even prospects and I try to kind of like let me tell you why this is exciting too. It's because there's possibilities within that. That means the behavior has changed and we're seeing that shift of behavior moving into retention and how do we do retention better and why is retention important and why is retention has become the driver of a lot of what we're doing. The possibilities are absolutely endless.
Speaker 1:I personally, to be honest and now that you know my background before those 15 minutes is I love that shift. I really do, because I think what that shift has been able to provide the market is starting to show the market is that we got to get just to the subscribers. Specifically, when you start thinking about retention as a top metric instead of acquisition, you realize that you're getting close to the human that you're serving and that the value that you're providing them and to me that is a full circle moment that's when you connect with people, when you know that you're making a difference. That to me, is a beautiful shift in the market.
Speaker 2:I love the way you just put that. In fact, it's a beautiful lead into my other question which you prompted a moment ago, which is you said that 2024 was a big year for Recurly because you got close to your customers. And that means, look, everybody I ever spoke with on this podcast has said, yes, we're customer-centric. There's always and not to disparage anybody, because I think most people are sincere about that but getting close to your customers is first of all. It means different things to different people, but it's not an easy thing to do. You have to be really intentional about it.
Speaker 1:So how did?
Speaker 2:that work for you at Recurly. What did you do to achieve that?
Speaker 1:Yeah, I'm going to give you some examples and I'm going to highlight our CEO here for a second and see if he gets all pumped up about this. But when I met Joe almost a year ago our CEO, one of the things that literally was her first coffee meet and he said to me he had just taken on. Joe has been with Recurly since January of last year and he said I've had 10 customer meetings and I'm about to have 10 more and that was a big highlight for me. One of the things I spent I spent about eight months a year on customer experience. So I spent a lot of time. You know I had in CMO marketing all that, but I wanted to spend a lot of time in customer experience what it means, how you shifted, what you really concentrate on and one of the things that is transformation like there's so many different tools and technologies and things that you can do, which is amazing and AI and what they're doing for it, but there's nothing more human and more rewarding. Back on, the things that you're going to do as a business that actually go in as a whether it's a C-level management director go and talk to your customers One of the things that Joe did that. I really, really loved and I did.
Speaker 1:When I came in too. I followed along because I loved it was he actually asked our customers to give him a grade. Joe is a big competitor guy so you know like if it wasn't an A plus he was going to go for the A plus. But to me that is an example of real life example of how you get close to your customers. The reason I'm giving you that example is like once I came along, it was clear to us that that customer proximity is what really changes things. We can change onboarding, we can do a lot of things for customers different, but if we don't actually talk to them and it doesn't need to be, I feel like in our world it became, especially in SaaS it's like, oh yeah, just have the CSM reach out. It's the CSM's job to talk to the customer.
Speaker 2:They fix everything.
Speaker 1:Yeah, it shouldn't be that. That's like a heavy load for a CSM, right Like? Why do we not get more intimate with our customers? Why can't? And it doesn't stop there, right Like. So for me, for example, I met with about 10 of them at the beginning as well. I asked them to give us a grade, but I did ask them a lot about their experience with us, and one of the things that we start doing different and it was kind of like our mission to was to get closer to our customers and invest in the customer customer side.
Speaker 1:We, um, joe, hired Rachel, who is our chief customer officer. Great track like the way she sees customers is. I absolutely love it. She literally freaking. Rachel wakes up every single morning and she's thinking of customers and she has built the programs that give us that proximity. So you're thinking probably wait, wait. So as a C-level, are you guys all spending 10 customer meetings or whatnot? No, that's where the chief customer and their team would run for us.
Speaker 1:Different programs that we get to that proximity, ideas and programs that, for example, have been very successful for us. After she arrived, she built the executive program with that in mind, giving us that proximity. I love that program. We're all super competitive. We have to within our executive team, but it gives us that touchpoint, quarterly touchpoint, with some of our accounts. So it's not like customer experience is the CSM's job only, like customer experience is the CSM's job only. I have a big belief that the customer job is everybody's job, is a marketing role, is a sales role. Our customer's experience starts from the moment we generate the lead. So, yeah, I think customer proximity is important.
Speaker 1:Any program that you can run that is getting you close to customers. Proximity is important. Any program that you can run that is getting you close to customers. In our scenario, something that has been very successful for us, and we just launched a new series of that. So we're global. We launched the what's Next series. What we do is we bring prospects, yes, but we bring customers within different areas globally. So we were just in Stockholm and we brought some of our customers some prospects. We let our customers get really close to prospects on their experience, how they're doing, what their experience is, but it also allows us to get close to them, so yeah. So I think proximity it's very important. I think it changes the game. It changes the way you make them feel. Let them feel that they can escal with the full agreement. But you, you mentioned your executive council.
Speaker 2:Does that operate kind of like a you know a customer advisory council where you know actual customers meeting with C-levels or what? What's the mechanics of that? How does that work at Recurly?
Speaker 1:It does. It's so cool. So I'm actually heading out tonight, senior city to for one of ours. So what we do is one of our customer reviews, one of our EVRs. So our CSM is there. Probably an account management will be there, right, and the C-level normally joins and what we do is we go through the account, we see what's going on, what can we help them with, see what results, what growth we're seeing.
Speaker 1:But I think a big piece of the puzzle is so we're meeting intimately with this customer only.
Speaker 1:So it's not a lot of customers in the same room, which is what I would consider kind of more of a cab.
Speaker 1:In that sense this is more intimate one-on-one, but with a bunch of people from Recurly. But one of the things that I think is game-changing for that and it has been game-changing for us and it was game-changing for 2020, probably where we see our momentum in 2025, is kind of the subscription news that I was mentioning to you is we are able, able, within our data, we have so much data that our system collects from subscribers' behaviors that we can during those meetings we can share with them. It's not that we're sharing the state of subscriptions report specifically, but based on where their goals are, to say, hey, well, so if you are considering like a shift in retention and personalization, let's talk about options, idea marketing, creative, like things that you can do through the system so that you can get there faster. But it's a lot of. What we're seeing is a lot of guiding the way. Showing them. The way has been very it's what they're asking of us, which is really cool.
Speaker 2:Some of the kind of highlight statistics from your report point to, as you mentioned, a drop in acquisition rates and, like you mentioned, that's bad, but it's also a huge opportunity. If you can see it that way. It it creates opportunity for people who can, who can leverage and take advantage of it. Um, my particular background, just to set context for this next question is I I came through the loyalty space, which has got so much to do with retention and the mechanics of keeping people involved and, you know, through all kinds of different mechanisms like rebates and giveaways and experiences and discounts, and you know you name it. If there's a way to kind of rebond with your customer, you know it's out there and people are trying it. However, that's different from getting close to your customer.
Speaker 1:It's different.
Speaker 2:It's a different mentality. I mean, we can apply and I'm so glad we're having this conversation because I'm in the midst of multiple discussions on this very topic right now with clients of ours what it really means to build retention, and I think you said it really really well it means getting close to your customer because we can apply the mechanics. We know they'll, they'll, we can produce this kind of a return and a lift. We absolutely know that. But beyond the knowns, you know, yeah, we're going to generate a X percent lift because we apply these mechanics with this budget. But that's different. That's different from getting into the head and the mind and the heart of who you're servicing that's exactly it.
Speaker 1:It's like see, like I'm so glad you said the heart, because I was just in a discussion last week on this where, um, I was with actually in a podcast where he's like, so, is this about feelings? I'm like a hundred percent.
Speaker 2:Right.
Speaker 1:It truly is. I always say that it's about, yeah, you're giving value to your customers, but you're making your customer feel things too as you're responding to their asks, their requests, or the value that you're providing them. I call them always like magical moments. So, like magical moments, as you become more intimate with your customers, what magical moments are you having for them? So I think there's. So there's two things.
Speaker 1:I think one is getting close to your customers to have to be able to impact retention and over time, you are going to be able to make that happen if you get that intimate and that close and don't be afraid to to get close enough that you have to have those one-on-ones, that it doesn't need to be like the massive let's create the big council where 25 or 100 have to be in there, it it just they're all going through different things, um, but the, the one thing that you touch on that I think it's important to talk about as far as the opportunity and I think it's been a great opportunity for our customers, specifically especially since you spend so much time in loyalty is how do you get creative with subscribers today and how do you get those loyalty programs today? So you and I are both consumers, subscribers, or God knows how many subscriptions.
Speaker 2:Yeah, I can't answer that. Can I just not answer that please?
Speaker 1:Well, that has become like. I had a problem before, but then I joined Recurly and they all laughed, because if we have a prospect, I always sign up for whatever they are and I just stay on. And so our CRO makes fun of me for that and he's like are you? I'm like it's the best way to get to know, like, who we're going to talk to.
Speaker 1:So I have to get all these boxes. I'm like, oh, that's a new prospect, but the what's really? Or like a new streaming or something that I'm doing, but the loyalty programs and the creativity that I think subscribers or we are demanding as subscribers in that scenario it's, it's pretty interesting, like loyalty programs and you'll have to tell me if, if you agree with this, since you were in loyalty for so long. They used to be nice to have. We don't see that anymore. Like through our report, loyalty programs have been. If you are worried about or worried, no, but if you are concentrating on retention, loyalty programs are a must have and the creativity that you have to have with it.
Speaker 1:So for accounts that we have that are managing thousands and thousands of subscribers, like, how do they get intimate in that way? Right? So obviously it has to be through the system. What is the system being able, the software is being able, to provide them? What information is it being able to provide them? As far as behaviors Are subscribers, do they like the discounts? Do they like VIP content? Do they like the discounts? Do they like VIP content? Do they like premium features? There's so much behavior that is happening for them all at the same time and then being able to double down on that information, to then respond back hey, vip content is not doing anything for us, but actually premium features is incredible. And then I go into a whole other topic where it's like cancellation on pausing. That's a super cool subject too, and it's now a new thing and it's a new, very, very exciting opportunity too.
Speaker 2:To recapture, yeah, I mean you know who. Who in loyalty and subscriptions still believes that a cancellation is a cancellation right. Sometimes it's not and actually just just reactivating a small portion of that is real revenue in many cases.
Speaker 1:Yeah, it is. So. You know, through the state of subscriptions report we talk about. Cancellation isn't goodbye by law. You know, they we do. Everyone has to have the ability to cancel easy. But when you think about it, it's actually as a subscriber, the experience that you have with being able to cancel when you want and or being able to pause when you want, you will become a returning subscriber and that's where actually, retention numbers are becoming the highest.
Speaker 1:Pausing is incredible. You know, I am. It's incredible. You know we have done some research on the pausing side and how subscribers are demanding options on pausing. So like, pause me for a month, pause me for three months, pause me for the year. I'm more likely to return and they become longtime subscribers. I had a customer at one of our events just recently um, that said in miami actually. That said, I was asking her and I said so do you think that you're quiet subscribers? The ones that subscribe don't use, you know, don't use the app, are you? How much time are you spending on them? Versus the ones that are perhaps pausing or canceling or providing those cancellation offers and everything is on that side. The ones that are not using it. They're not going to stay long term and that used to be the norm before. It used to be where everyone will spend their time and that shows a lot of like intimate behaviors, I think.
Speaker 2:There was. I honestly don't remember if it was your report or if this just stat stuck in my head from somewhere, but that something like 70% of subscribers would stick around of subscribers would stick around wouldn't cancel a subscription if a loyalty incentive was offered to them.
Speaker 1:It was a report. It's incredible. Right, that is a tremendous number. So, in the sense of things, that is a longtime subscriber. You're not losing them. So, with offers and whatnot, you still know that you're not losing them. So, with offers and whatnot, you still know that that you won't, uh, get them back. So it's like it's just how they, like humans, are demanding different behavior and and it is.
Speaker 2:It is very cool to watch the switch and that market um, I've got literally another dozen questions that I think that, well, we shouldn't go through today because we'll never finish this conversation, but I do think I think it would be great to try and do this again. Here's the funny thing We've been trying to schedule this conversation for months literally months at this point and we finally did it and now I'm suggesting we have another one. So I'm sorry to everybody who's involved in scheduling these things, but there's so much to talk about here, because you mentioned that you've spent time in customer experience and the overlaps and effects on loyalty with subscriptions, with customer experience, with anything that goes into customer retention and building out customer lifetime value. It all kind of mashes up into a beautiful, if it's done well, kind of machine that can produce tremendous results and tremendous bonding and tremendous relationships and great feelings. But I only know a handful of companies who are really doing that well. A lot of people are kind of doing it piecemeal.
Speaker 2:So the next conversation I would love to have with you and maybe somebody else from your team, if they're willing to just kind of deal with this, is look, you guys have a view to the way to do it well. You've seen systems that are put together beautifully and that work beautifully. And then you've seen people who are kind of like we're almost there. And then you've probably seen people who are like, oh man, this is rough, we got to start over here, and everything in between. But I think those kinds of perspectives, real world, like you see it, advice, guidance and perspective would be massive. So I'm going to advocate another conversation.
Speaker 1:Yeah, absolutely Anytime. I would love to, and you know, if it's not me, Rachel will be another great one on customer experience. There is so much to uncover that we didn't even get to touch. Based on customer experience and how that connects to everything and to every team, and really the role of experience on driving growth and revenue. I think it makes it a very exciting time and I actually think it kind of got transformed after the pandemic too.
Speaker 2:Completely agree.
Speaker 1:So there's just so much still evolving on that side, but you know we'd love to talk about it. I I spend my months that I spent. I had spent a bunch of time and um in sales very early years like eight months because I lost the bet and I feel like in a customer experience I should do the same see more stuff we have to talk about.
Speaker 1:But it opens your mind when you're like in that seat or carrying the bag and you're like, oh my gosh, there's so much that we still need to do and there's so much awareness that we still need to be doing, and so, yeah, we'd love to just dive into any of that.
Speaker 2:There's so much more to talk about. Well, with all that said, lina, thank you so much for your time. Lina Tonk is CMO at Recurly. You should pay attention to Recurly, pay attention to this podcast, because we're going to really try hard to get back together and continue this conversation. So thank you.
Speaker 1:No, thank you so much for having me. That was so much fun.
