How Can Brands Combat Subscription Fatigue?

Are consumers tired of monthly fees? Where and how can you offer value that goes beyond the limits of transactional benefits?

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  • Ever since Amazon elevated its Prime programme into a cornerstone of its business strategy, brands have been trying to implement out-of-the-box strategies to build ethos and drive revenue. Leveraging the allure of ongoing value and exclusive perks to foster long-term loyalty, subscription-based loyalty programmes are proving to be effective. 

    A survey revealed that the global loyalty management market is projected to reach  $44 billion by 2032 at a CAGR of 23.5% between 2023-2032, prompting brands to change the dynamics of their customer loyalty models. Moreover, subscription based loyalty programmes are helping advertisers gain access to customers’ first-party data and deliver hyper-personalised incentives.

    Cutting through the noise 

    Over the last few years, global brands have been switching to a subscription-based loyalty programme as an initiative to connect closely with target customers. In this ever-changing customer-centric world, these subscription-based loyalty programmes also create an emotional draw, making customers feel valued. 

    A study unveiled that 79% of consumers participate in at least one retail membership, subscription or loyalty programme. The same survey revealed that 77% of customers with retail subscriptions buy more products as compared to the ones who don’t have subscriptions. 

    How does this model help brands and boost customer retention as an end result?

    • Understand the psychology of affiliation and community better
    • Offers tangible value and convenience to members and subscribers
    • Creates better interaction points for customer engagement and marketing 
    • Enables more sophisticated personalisation and insights into customer behaviour 

    Also Read: How Are Mobile App Trends Helping Indian Brands?

    First-party data to offer personalised experiences  

    As customers continue to become more tech-savvy, brands and marketers are matching the pace by implementing innovative technologies in their existing subscription-based loyalty offerings. They have incorporated different strategies for overcoming first-party data collection challenges by introducing various free loyalty programs. 

    For instance, PepsiCo, a global FMCG brand, utilised the receipt upload feature to overcome data collection hurdles and drive engagement. This feature enabled the brand to offer personalised incentives based on customer behaviour by leveraging the capabilities of first-party data. 

    The company executed a campaign to capture the transactional data of its products’ purchases. Through this effort, PepsiCo was able to gather the transactional data of over 13,000 products that were purchased. As a consequence, it enabled the brand to analyse the high-performing products in the region. 

    On the other hand, Shell introduced an app-based influencer loyalty programme, in collaboration with BI WORLDWIDE India. The programme utilised the data-driven and personalised incentive mechanisms on the brand’s product sales, further surging its tertiary sales by 1.2 times, along with a 97% overall program satisfaction score.

    In 2023, Sunglass Hut, teamed up with metaverse avatar platform Ready Player Me to offer digital sunglasses, allowing users to accessorise their digital avatars for claiming free sunglasses. As per the program, the users had to scan a QR code on “SmartShopper” digital screens installed inside the Sunglass Hut stores to redeem virtual Ray-Ban and Oakley sunglass models. 

    One of the biggest hurdles in building a successful paid loyalty program is the value users get from them, leading to subscription fatigue. It’s a phenomenon where consumers are overwhelmed with the massive amount of subscription services but aren’t aware of how to redeem them through loyalty points. This has been a major challenge across various industries, such as retail, hospitality, travel, etc. 

    The trend towards subscription-based loyalty programmes shows no signs of abating, prompting global brands to explore innovative tactics. While some opt for paid membership clubs, others are embracing inventive approaches to gather first-party data for personalised recommendations.


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