Shampoo, toothpaste, signed autographs, toilet paper, letters from dead people and weed have more in common than you think. You can get them delivered to your front door (or phone) every month for a subscription fee. But only some of them are actually useful.
The subscriptions people actually keep are ones that offer the most bang for their buck on a regular basis — otherwise, why keep paying? Yahya Mokhtarzada, chief revenue officer of subscription management company Truebill, said his own subscriptions range from weird (socks) to useful (razors), but what they have in common is their value to him.
“It's a little bit embarrassing to admit, but I watch Netflix probably at least every other day,” Mokhtarzada told Protocol. “It’s not only about how often you use [subscriptions], it's more so how often it gives you value.”
Truebill ran the numbers on the subscriptions that people cancel the most, the ones they keep and the weirdest subscriptions you’ve never heard of. Let’s dive in.
The subscriptions people cancel
Subscriptions for Audible, Time, Amazon Kindle, The New York Times and BeenVerified — in that order — have the highest cancellation rates, Truebill found based on the percentage of users who have a subscription and canceled last month. All of those subscriptions have cancellation rates above 15%, with Audible’s rate sitting about 18% (that’s nearly $15 per month for audiobooks you can get at a free public library, by the way).
Mokhtarzada said high cancellation rates aren’t always the sign of a bad product. Audible, for instance, has a massive user base. As of 2020, Audible Plus had about 300 million monthly active users.
“That's actually a positive reflection of just how good Amazon has done at spreading the word,” he said. “You want people to try it, experience it and then decide if it's for them or not.”
Audible aside, Mokhtarzada said subscriptions with higher cancellation rates tend to fall in two buckets. People may have signed up for an “aspirational” subscription, which might involve a gym or audiobook membership, with the hope that they’d finally find time to listen to books or work out at the gym. He said sign-ups for these subscriptions spike around New Year’s, and cancellations for them rise around March.
“People sign up to the subscription, almost hoping that it gets them into the habit or forces the habit on them,” he said. “And then when that falls through, they end up canceling it.”
On the other hand, people may have caught themselves in what Mokhtarzada calls a “sneaky” subscription, which might involve a fashion subscription or in-flight Wi-Fi. “It’s not all of them, but there are some bad actors there,” Mokhtarzada said.
The subscriptions people keep
The least-canceled subscriptions include productivity services like Wix, Squarespace, Dropbox and Zoom; streaming and entertainment services like Twitch, Xbox Game Pass and Blizzard Entertainment; and financial subscriptions like Stash and Wealthfront, Truebill found. All of those services have cancellation rates of 1% to 2%.
Although Netflix doesn’t have the highest retention rate, Mokhtarzada pointed to the streaming platform as a “gold standard” in terms of retention because it’s both easy to sign up for and cancel. He said lots of companies try to grow their businesses by sneaking people in or making the cancellation process a headache, but Netflix does the opposite. Customers can cancel or pause their subscription at any point, and its retention rate sits around 4%.
“And the way they grow their business is just by providing a great product, and their product is so good that you feel like you're missing out if you don't have it,” he said.
Amazon Prime is another example of a subscription that sticks. It offers so many benefits that they start to outweigh the cost of the subscription itself. “They're constantly adding new perks and benefits to it that just make it a no-brainer to have,” he said.
The weirdest subscriptions you can buy
Here’s the moment you’ve all been waiting for: The subscriptions you didn’t know people have (or need).
Unfortunately, it’s not all laughs. Mokhtarzada said the amount of money people spend on credit repair and identity protection services is “shockingly high,” and the products themselves are relatively expensive. Ironic, isn’t it? The monthly cost for Creditrepair.com’s most basic package, for instance, is almost $70.
“It's unfortunate, because if you're talking about credit repair, we’re generally speaking of the people that are most stretched financially,” he said. “It's just a bummer.”
Sorry for that depressing bit of data. But on a lighter note, Truebill’s data also shows that there are a never-ending number of “subscription boxes” out there. There’s a box for just about everything, from a Japanese food subscription service to niche dating (just discovered there’s a service specifically for music lovers, if that’s your thing).
Mokhtarzada said he likes popular boxes like The Farmer’s Dog for pet food, sock boxes (did you know there’s a sock-of-the-month Club?!) and Imperfect Foods, which delivers a weekly staple of fruits and vegetables that would otherwise be thrown away.
People may not hold onto their box subscriptions for long, and Mokhtarzada said that’s OK. It would be considered a win for you to drop your dating subscription, because it may mean you’ve found what you’re looking for. And how long do you really need a monthly toothpaste supply before your bathroom cabinets are filled with tubes? Mokhtarzada said a subscription works if people find value in it for a period of time and don’t feel conned into subscribing.
“You can either make a one-time purchase or sign up as a subscription, and that works,” Mokhtarzada said. “But what’s not good for people is when you go in for a one-time purchase, and the language isn't super clear that you are ending up into a recurring billing subscription.”