Q&A: Why are businesses looking towards adaptable subscription models?

A university student takes a course via remote learning at home in Beirut, but staying connected during state power cuts that can last more than 20 hours a day comes with a financial cost – Copyright AFP ANWAR AMRO

How are consumers balancing the economics of subscriptions, spending, and finding value in their choices beyond just the price paid? How are they evaluating the mix of products, services, bundles, and lifestyle convenience that different subscription options bring – and how is that in turn influencing the strategies businesses are employing to meet their needs?

This leads to an interesting intersection of ecommerce, customer experience, and timely topics with economics and consumer spending such a focus right now. Many consumers, for example, are turning to clothing rentals to save on large clothing purchases, or are increasingly looking for options to pause or upgrade/downgrade their subscriptions instead of cancelling entirely.

To learn more, Digital Journal spoke with Rachel Sheriff, Chief Customer Officer at subscription management platform Recurly, which works with companies ranging from Paramount+ to Nerdwallet to Nuuly and provides a full suite of services for managing all aspects of subscriptions: billing, customer experience, ecommerce, and marketing.

Digital Journal: Consumers are increasingly discerning with how they spend their dollars, particularly with recurring expenses. How are you seeing them make those value decisions when it comes to subscriptions?

Rachel Sheriff: The core of a subscriber’s value decision today is about adaptability. Consumers are living complex, often unpredictable lives, and their subscriptions must reflect that elasticity. We’ve moved beyond a world where a subscription is a static, ‘set-it-and-forget-it’ commitment.

A service is deemed valuable when it offers control and flexibility. This means offering easy pathways to adjust the commitment – whether that’s pausing the service when a budget is tight, seamlessly downgrading a plan when usage patterns shift, or being able to utilize their preferred payment method globally. Recurly’s annual state of subscriptions data shows that pause usage rose 68% year-over-year, so we know people aren’t looking to cancel entirely; they just want options that fit with what’s going on in their lives or wallets at any given moment.

When a brand builds a service that reflects this necessary fluidity – offering curated products, flexible delivery timing, or highly relevant content – it fosters trust and emotional connection. The more a service feels purposefully designed for the subscriber’s specific situation, the more reliable it is perceived to be, and the more likely they are to commit for the long term.

DJ: In today’s uncertain economy, what factors are influencing how a subscriber stays loyal or cuts back?

Sheriff: In an economy where every dollar is under scrutiny, loyalty is no longer earned solely through content or product; it’s driven by three strategic pillars: value, control, and trust.

Value is simply the consistent delivery of utility that exceeds the monthly cost. Subscribers must feel they are deriving tangible, consistent benefits that warrant the recurring expense.

Control is perhaps the most critical factor today. Subscribers refuse to feel trapped. Brands that empower subscribers with genuine flexibility – through options to pause, easy plan customization, and a variety of flexible payment methods – are meeting the consumer’s need to manage their finances proactively. Putting the subscriber in the driver’s seat of their financial commitment is essential for retention.

Trust is the foundation. It begins with absolute transparency from the very first touchpoint, such as clear cancellation policies, and extends through every part of the experience. Especially during economic uncertainty, this reliability is paramount. When businesses prioritize open communication and put the subscriber’s experience at the heart of their operations, they are building long-term, resilient relationships that can withstand economic headwinds.

DJ: In that vein, then, what are you seeing brands do now to meet consumers who are more cautious with their spending right now?

Sheriff: We are witnessing a profound shift towards adaptable subscription models that genuinely acknowledge the economic pressures on consumers. The smart brands recognise that caution doesn’t equal cancellation; it means being more selective and seeking efficiency. They are actively rethinking how they package and deliver their value.

This strategic adaptation typically manifests in a few key ways:

• Strategic Tiering: Offering a wider, more granular range of subscription tiers allows consumers to self-select the service level that perfectly matches their current budget and usage patterns. We guide customers to ensure this upgrade/downgrade path is seamless, allowing for friction-free movement within the ecosystem.
• Proactive Flexibility Tools: Leveraging features like a clear, one-click pause option is no longer a perk; it’s a necessary retention tool. This small adjustment makes a meaningful difference by signaling genuine care for the subscriber’s financial situation, allowing them to retain their loyalty without having to cancel permanently.
• Personalized Loyalty and Perks: Brands are using data to deliver loyalty rewards and perks that are tailored to the individual. By offering bespoke benefits on top of the core product, businesses are deepening the perceived value and justifying the recurring charge, making the subscriber feel truly recognized and rewarded for their commitment.

These strategies might seem like minor adjustments, but they fundamentally change the subscriber experience, providing the necessary value and efficiency that consumers demand from their subscriptions today.

DJ: On the topic of efficiency, many subscriptions are partnering with similar or complementary services to maximize the impact for consumers increasingly looking for economic value in their subscriptions. What role do bundled subscriptions play in making services feel more “worth it” during times of economic pressure?

Sheriff: Bundling is emerging as a powerful, elegant strategy to solve two major consumer challenges: the search for economic value and the overwhelming complexity of managing multiple services.

To your point, why should a consumer pay five separate bills for similar services when a well-curated bundle can deliver a lower overall cost and, crucially, unlock access to complementary, non-core perks – like a loyalty program or a trial of a highly-desired adjacent service?

Bundles are not simply discounts; they are an increase in perceived value and a reduction in friction. In a time when consumers are carefully scrutinizing every recurring charge, combining similar or complementary services can elevate a subscription from “nice-to-have” to “essential and justifiable.” For the subscriber, it simplifies life – fewer decisions, fewer logins, and fewer monthly payments to track. For the business, it’s a strategic way to increase Average Revenue Per User (ARPU) while significantly lowering churn by making the overall offering stickier. It’s an effective collaboration that ultimately maximizes the impact for the end consumer.

DJ: How are businesses proving their value to consumers who are not only tightening budgets but also feeling overwhelmed by too many services?

Sheriff: To your point, there are so many subscriptions out there on the market now that consumers are definitely feeling overwhelmed trying to pick and manage the right ones for their needs. Beyond the increase in personalization and flexibility they’re building in, I think subscriptions are increasingly focusing on the customer experience as a core function of the subscription experience – from acquisition to retention and everything in between.

From the moment someone signs up for a subscription, they’re increasingly being met with transparency and clarity on the services they’re paying for. They’re being proactive throughout the customer lifecycle to help subscribers do things like solve payment issues before they disrupt service or identify plan adjustments that make a subscription more useful for the subscriber at that point in time. When someone moves toward cancellation, companies are curious and ask if that customer really needs to cancel altogether, or if they just need to downgrade or pause instead. And even after a cancellation happens – because we know that 20% of subscribers are returning customers – they’re keeping that relationship warm in case customers want to come back in the future.

DJ: Is there anything else you’d like to add?

Sheriff: Yes…With so much uncertainty in the economy and consumers being extra mindful of how they spend, the choice is up to businesses to decide how to give their customers the best experience possible.

The subscription industry is growing rapidly, and standing out requires building unshakeable trust with your customers – both new and existing – with the right blend of delivered value and genuine care for their experience.

I think there’s a tremendous amount of opportunity to bring great services to people today if businesses are willing to innovate, be proactive, and listen to what their customers need – and then deliver it with confidence and flexibility. That is the Recurly mindset, and it’s the future of the subscription economy.