Reducing Acquisition Costs in a Subscriptions Economy Amidst Inflation

Bringing down acquisition costs for your subscriptions business is a challenge that requires creative solutions. After all, paying more isn’t the only way to gain new customers and keep the ones you have. Today we’ll share with you effective strategies…


Bringing down acquisition costs for your subscriptions business is a challenge that requires creative solutions. After all, paying more isn’t the only way to gain new customers and keep the ones you have. Today we’ll share with you effective strategies that will help lower your business’ cost per acquisition even in the midst of an inflation.

Subscriptions eCommerce and The Churn Dilemma

For subscriptions eCommerce firms, going through an inflation can also mean losing subscribers. This is known as customer churn. Even though it’s trickier to attract new customers during this time, it’s also necessary to balance the losses.

One study on subscription commerce found that the estimated total monthly expenditure on subscriptions fell by 46% in March 2022 compared to October 2021. The study also claimed that reducing overall expenses was the primary motivation for 54% of consumers who canceled their subscriptions, while 28% stated that the prospect of rising product costs contributed to their decision to cancel.

People are cutting off their subscriptions so they have more freedom to purchase at their own discretion. Instead of making regular payments for something they perceive as non-essential or excessive, they simply choose to let it go and resubscribe when they need it again. Unfortunately, this prevents subscriptions providers from consistently bringing in earnings.

The study revealed as well that pricing was not the only reason customers altered their subscription service interactions. Unsatisfactory experiences like lack of order customization features or limited access to it was also a relevant factor in many consumers’ choices.

With these new insights into subscribers’ mindset and needs, it’s clear that subscriptions firms must put more effort into preventing cancellations. However, the unfortunate truth is, even though it costs five times as much to acquire a new customer than to retain an existing one, 44% of companies still put greater focus on customer acquisition.

Remember, taking care of your subscribers can bring you better returns than implementing lead generation strategies that require significant investment and take time to produce ROI.

Subscription retailers are exposed to vulnerabilities in the face of high inflation. That’s why it’s important to find ways to keep customers in the program and come up with strategies to bring down the cost of customer acquisition.

How Global Inflation Affects The Subscription Business

As a subscriptions provider, particularly if you’re operating within a niche market, you might be inclined to believe that the only way to grow your business is to spend lots of your budget in marketing and advertising. However, that’s not always the case. For instance, there are ways to sustainably maintain a lower customer acquisition cost, which we’ll talk about later on.

But when something beyond your control happens, you may find your business costs rising while consumers are cutting back on their spending. One such example is the widespread high inflation, which is putting the subscription economy at risk.

Subscriptions-based businesses thrived due to their reliability when most of the world was shuttered off. In fact, towards the end of 2021, eCommerce and payment methods tracker PYMNTS discovered that the average US consumer had five retail subscriptions.

However, with expenses rising and the value of money diminishing due to inflation, it’s getting more costly to run a subscriptions business and even trickier to acquire new subscribers. While subscription companies are compelled to raise fees, consumers are reevaluating where they’re putting their money. In fact, the Kearney Consumer Institute found out that the majority of consumers they surveyed would like to spend less than $50 per month on subscriptions.

This shift in the subscriptions business landscape reinforces the fact that in order to stay in the game you must not only keep your costs down, but also offer consumers something of value and more importantly, something that they perceive as beneficial.

Lower Acquisition Cost and Overcome The Subscriptions Fatigue

It’s true that acquiring new customers can be costly but the good news is, there are effective ways you can lower your cost per acquisition. Check out these ideas to get you started:

– Incentivize referrals

With referral programs, there’s no acquisition costs involved until you make a sale. One way to incentivize customers to gain referrals is to offer a discount for the next subscription cycle. You can also offer special gifts or rewards for every referral you profit from.

– Try affiliate partner programs

Utilize the influence of your affiliate partners to reach and engage potential customers. This is an effective way to reduce your customer acquisition cost because you pay your third-party affiliates percentage-based commissions only for every new subscription they’ve generated for you.

– Use content marketing to establish your brand

When people search for a solution to their problem, you’d want to be the first to provide them with what they need. By putting out content marketing materials that inform and educate such as blog posts, social media posts (e.g. user generated content), podcasts, and videos, you can put your brand on top of consumers’ minds and encourage them to try out what you have to offer.

– Highlight your competitive advantages

What can you offer consumers that they won’t find anywhere else? It could be your lower prices, the unique selections you have, or the convenience that you provide. Put the spotlight on those, but make sure to communicate exactly how they’ll benefit from it – that is, connect with them through their pain points.

Give your prospects an experience that will resonate with them by letting them select what they’d like to sample from your products or services before they commit.

– Ask for customer testimonials

Showing social proof is a powerful way to let others see the value and kind of service you deliver. Ask your top customers for testimonials because chances are, they’re already your advocates. You simply need to provide them with a bigger platform to share their experience with your brand.

Prevent or Mitigate Losing Subscribers

If you’re worried about losing subscribers over the course of high inflation, the first thing you can do is realign your business model with what consumers want and what the market calls for.

Here are effective ways how you can recalibrate your subscription service to provide an exceptional user experience and prevent or mitigate inflation losses:

– Leverage relationship marketing

Engage with and educate your customers across all your channels (website, social media, email, etc.). Establish your brand as an essential part of their lives. You can do this by showing customers your brand’s value in their day-to-day workflow and by demonstrating how they can use your products or services to solve their problems.

– Establish a loyalty program and rewards system

A 2020 McKinsey survey on loyalty programs found that consumers who pay for loyalty programs are 60% more likely to spend more after subscribing. Paid loyalty programs also drive bigger purchases, higher purchase frequency, and brand affinity as opposed to free loyalty programs. So if you haven’t built your own loyalty program yet, now is the best time to start.

Rewarding customers can also encourage consistent purchases and keep them from unsubscribing. For instance, provide rebates or incentives like a gift when they reach a certain spending tier or higher discount rates for special occasions.

– Acknowledge and resolve customer complaints

According to Strauss and Seidel, dissatisfied customers whose complaints are taken care of are more likely to remain loyal, and even become advocates that help you gain new customers. So pay close attention to your customers’ concerns and follow through with a resolution when needed.

– Offer better personalization

Put in the effort by tailoring your offers around your customer. You can accomplish this effectively by looking at the data you have and using it to find out their consumption patterns. Then offer what they might also need or want based on what they’ve previously shown interest to. This could be by way of giving product suggestions, bundled offers, or special discounts.


To successfully run a subscription business, especially in times of high inflation, it’s always important to find ways to reduce costs without sacrificing quality. So before you launch any customer acquisition or retention strategy, make sure that your cost per acquisition and retention program costs do not outweigh the profit that you stand to gain from getting or keeping a customer.

Your customers rely on you to deliver what they need. Trust your business with a partner you can depend on. WooCommerce subscription is an eCommerce platform that provides you the tools to drive consistent profits, from flexible payment terms to convenient migration. Contact a WooExpert from Cultura Interactive today to get expert advice and guidance on setting up your online store!



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