CRO investment Reimagined: The Subscription Opportunity

TLDR

When customers pay monthly instead of once, the mathematics of CRO investment completely changes.

We explain how a 1% conversion improvement that generates £400 for traditional ecommerce could be worth £7,200 for subscription Brands, and explains how this multiplication effect allows subscription companies to justify bigger CRO investments that would never make sense for one-time purchase businesses.

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Full article

When customers pay you every month instead of just once, the maths of CRO investment completely changes.

Most Brands calculate return on investment pretty simply. If you spend £1,000 improving your conversion rate and it generates £2,000 in extra sales, you've doubled your money. But what if those customers don't just buy once? What if they keep paying you for years?

This is where subscription businesses have a massive advantage.

A single improvement to your conversion rate doesn't just affect this month's sales. It affects every monthly payment from those customers for as long as they stay subscribed.

How the Numbers Change Everything

Let's look at an example. Say you run an ecommerce site selling protein powder. Your average customer spends £40 per order. If you improve your conversion rate by 1%, you might get 10 extra customers per month, generating £400 extra revenue.

Now imagine you offer a subscription service instead. Those same 10 customers don't just pay £40 once. They pay £40 every month. If they stay subscribed for an average of 18 months, that 1% conversion improvement is worth £7,200 instead of £400.

This changes how much you can afford to invest in optimisation. Suddenly, spending £5,000 on a conversion rate improvement that would seem expensive for a one-time purchase business becomes incredibly profitable for a subscription business.

The Subscription Investment Advantage

This multiplication effect means subscription businesses can justify investments that traditional ecommerce businesses simply can't afford. They can spend more on customer acquisition. They can invest in longer, more sophisticated onboarding processes. They can afford to be picky about the customers they accept.

Think about Netflix's approach. They spend enormous amounts on content and technology because they know customers who love the experience will keep paying for years. A traditional video rental business could never make those investments because each customer only generated a few pounds of revenue.

The same principle applies to your optimisation efforts. Subscription businesses can afford to test more sophisticated personalisation, invest in better customer onboarding, and create more comprehensive trial experiences because the payoff compounds over time.

Balancing One-Time Sales and Subscriptions

Many Brands don't have to choose between one-time sales and subscriptions. Some of the smartest companies offer both, optimising each for different types of customers.

Amazon does this brilliantly. You can buy products individually, or get them delivered regularly through Subscribe & Save. They use your purchase behaviour to suggest when a subscription might make sense, and they optimise the experience differently for each option.

This approach requires more sophisticated optimisation. You need to understand which customers are good candidates for subscriptions versus one-time purchases. You need to test different offers for different customer types. You need to track how one-time purchases might lead to subscription relationships over time.

Testing Subscription Offers Effectively

Optimising subscription offers is more complex than testing traditional products. You're not just testing price and features. You're testing commitment levels, billing frequencies, trial periods, and cancellation policies.

Each of these elements affects both conversion rates and customer retention. A longer free trial might reduce conversions but improve retention. Monthly billing might increase signups but reduce lifetime value compared to annual billing.

The key is testing these elements together rather than in isolation. The businesses seeing the best results run sophisticated tests that evaluate multiple variables and measure success over extended periods.

This represents a fundamental shift in how to think about revenue per visitor, creating massive opportunities for businesses that understand the subscription advantage.

Ready to audit your subscriptions? 

Get your FILDI Subscription Performance Audit now, identify exactly what's costing you money and get the roadmap to fix it.

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What does a Subscriptions Audit entail? We conduct deep analysis across your subscription data to present a comprehensive performance picture. Our proven methodology examines customer lifetime value, acquisition costs, growth efficiency, and retention patterns.

More importantly, you'll receive specific and actionable recommendations based on our findings. We don't just tell you what's broken, but we’ll also prioritise what to fix now

Our audit delivers immediate value: clear identification of your biggest revenue leaks, specific opportunities for growth and a strategic plan you can implement.

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