The Three Most Important Times of the Subscription Customer Lifecycle – Part One

David Walsh, Marketing Director at Intuit, offers a two part look into what software vendors need to do in order to fully capitalize on the subscription customer lifecycle.

Part one focuses on what you must do immediately after converting a new subscription customer, while part two shows you how to manage the first 48 and last 24 hours of a subscription period.

In today’s complicated world, it’s hard to know where to focus your limited time and resources. After working with subscriptions and SaaS at eBay, PayPal, McAfee and Uniblue, I have learned many lessons and want to share my first-hand experiences and insight into managing the subscription customer lifecycle.

When you work in subscription software and SaaS, you will reach out to your customers many times throughout the term of their software subscription, but there are just three times that really matter. To get the most return on your marketing investment, focus on these three important spots in the customer lifecycle:

  1. Initial sale
  2. First 48 hours
  3. Final 24 hours

I am going to give you some advice for each of these vital times.

Initial Sale

Help Your Customers Choose

Customers want you to tell them which product to choose, because you know which of your products would be best for them. You have to know your product strategy from the start. You should have at least a two-product solution so customers can move themselves up the value chain. Ideally you should have “good, better, best” product options. It is much cheaper to move customers up than acquire new ones.

I found great success by moving customers up the value chain rather than acquiring new ones. So, how do you move customers up the chain? Tell them it’s a recommended product; that it is the best seller; that it offers the most value. Include plenty of reviews to help customers feel comfortable. Make it simple for customers to know which product is right for them – make it obvious which product is the “best.”

Guide Customers with Discounts

If you just discount the heck out of the product, it destroys its value. You must have a discount strategy. Don’t just discount a product for no reason. Think about the product range and how discounts can move customers up the value chain.

Discounting can play a huge role. From my experience in the last 10 years, I have seen that when you take 50 percent off a product, you’ll usually see 100 percent increase in units, which should mean you have no increase in overall sales. But if you have a strategy, that’s not what happens.

If you give customers upgrade options, about 34 percent of customers will self-select the premium product – so you are actually selling more!  What’s really amazing is the effect that this discount has on the average lifetime, which is about 3.5 years for subscription software.

Use Time in Market to Your Advantage

The time in market for software is from three to 28 days. Customers spend more time looking for a complex, expensive product like financial management software and less time looking for less complicated software, like an antivirus product. Know the amount of time customers spend looking for a product like yours.

If customers always see the discounted product, they won’t think the product is as valuable. When you know your product’s time in market, you can plan your promotional calendar to maximize the number of times you should discount, and make sure not every customer sees the difference in value.

Collect the Right Data

There is definitely a trade-off between the number of pieces of information you need to make the initial sale versus the number of pieces you should ask for to assist you throughout the customer lifecycle.

The conversion rate declines by seven percent for every piece of information after five. So you really need to think about what that additional information will mean to the lifecycle of those customers. Are you going to want to contact them in the future? What additional information can really grow the value of your customers? It’s imperative to make sure you are asking for information you really need.

Know Your Leading Indicators

I highly suggest you spend the time researching your leading and lagging indicators. These markers gauge what your customers will do in the future which let you better predict your conversion rate and keep surprises at bay.

At one of my recent companies, we conducted research on our customers and found the following indicators:

  • American Express customers are more valuable because they will stay longer and choose the premium product more often.
  • Customers with Hotmail email accounts are less likely to buy premium products and less likely to auto-renew.

So at the initial point of purchase, we can already predict what these customers will do within their lifecycle. Know your leading indicators and you can do the same.


To make the most of your marketing dollars, know how to move your customers up the value chain and what data points to collect at the beginning of your subscription customer’s lifecycle.

Stay tuned for Part Two of David Walsh’s expert look into the most important times of the subscription customer lifecycle.