Should I stay or should I go: Key determinants for efficiently retaining a subscribed customer who decided to leave

Abstract

Subscription-based businesses have exponentially outperformed product-based businesses since 2012, leading to a revenue growth rate seven times higher than S&P 500 companies’ growth in 2020 (Zuora, 2021). Also formerly product-based businesses such as the New York Times have successfully managed the shift towards subscriptions with an increase of 690 percent in digital subscriptions from 2015 till 2020 (New York Times, 2021). At the same time, however, churn rose considerably, too. Digital service subscriptions have reached churn rates of up to 41 percent in 2021 from 29 percent two years before (Zuora, 2021). This recent development increases the meaning of retention management for subscriptions as a central construct in marketing theory (Schweidel, Bradlow and Fader, 2011; MSI, 2020) and among top executives (Rioux, 2020), which has been underrepresented for years (Homburg, 2017).