The #1 Way Subscription-Based Brands Can Boost Customer Retention

Personalisation isn’t the only way to drive recurring revenue and improve CLTV.

Today’s digital customers call the shots. Their expectations are sky-high, constantly evolving, and their loyalty is fleeting. While personalisation and optimising acquisition experiences are often touted as the ultimate solutions, they’re only part of the picture.

If subscription-based brands want to deliver lasting value and achieve sustainable growth, they need to rethink their priorities. Instead of focusing solely on acquiring new customers, they must address the entire customer lifecycle. And this is where Customer Lifetime Value (CLTV) comes into play.

CLTV is the total revenue a customer is expected to generate over the course of their relationship with your brand.

Why is it important? Customer acquisition is costly. Improving retention rates by just 5% can increase profits by 25%–95%. Despite this, 24% of brands admit to having no clear approach to CLTV, while 31% say theirs is basic at best.

At Daydot, we’ve seen first-hand how focusing on CLTV can transform subscription-based businesses. For example, we partnered with The Wall Street Journal (WSJ) to help them achieve their ambitious goal of three million members in three years. It quickly became clear that acquisition alone wasn’t enough. To meet their target, they needed to retain customers longer, maximise CLTV and take a lifecycle-wide approach.

To boost retention, it’s crucial to help new members quickly understand the core value of your product and build habits around it. Customers won’t figure this out on their own – data and experimentation are key.

For WSJ, like many subscription brands, low-cost trials (e.g., £12 for 12 weeks) help meet acquisition targets but create retention challenges. After just two months, customers face a sharp price increase – sometimes up to 700%. Without strong onboarding, churn becomes inevitable.

By identifying key retention-driving actions (e.g., downloading the app) and prioritising these within the onboarding experience, we transformed WSJ’s onboarding journey through experimentation. This improved the onboarding emails and website flow, resulting in an 18% increase in retention and a significant boost to CLTV.

Cancelling subscriptions is easier than ever. In some US states, and soon likely in Europe, laws require online cancellation options. While convenient for customers, this poses a new challenge: how do you prevent churn without a call centre agent to intervene?

To tackle this, we conducted research to understand why customers churn, their perceptions of membership benefits, and effective save tactics. Using these insights, we optimised WSJ’s cancellation flow, reducing churn by 24% and increasing CLTV.

Acquisition experiments also need to prioritise long-term value. For instance, focusing solely on low-cost trials may drive sign-ups but results in high churn. Conversely, offering only long-term memberships might reduce churn but will also hurt acquisition rates.

For WSJ, we adopted a new approach: measuring acquisition tests against long-term revenue. Whether testing discounts, value propositions, or page designs, we didn’t declare a winner until we had assessed each variant’s impact on churn and long-term revenue. This shift in focus helped WSJ achieve their membership goals and sustain recurring revenue.

1. Shift Focus to CLTV: Move beyond optimising acquisition conversion rates to focus on long-term growth and profitability.
2. Build Customer Habits: Help customers engage with your product or service early and often to improve retention.
3. Unite Around CLTV: Ensure all teams are aligned on a shared goal of maximising CLTV.