Do you feel that we live in a “subscription economy”? People can subscribe to almost anything — from streaming platforms and cell phone service to grocery delivery and pet food!
The situation is the same in the B2B area, especially the SaaS industry — the vast majority of companies offer subscriptions for their products and services.
However, the abundance of subscriptions can overwhelm users. They could end up spending substantial amounts of money on stuff they don’t fully use and can’t decide which service to stick to.
Well, what else to say than — welcome to the age of subscription fatigue?
Subscription fatigue is especially problematic for SaaS companies, as they built their success on this business model. So, we asked experts how companies can recognize and combat this phenomenon.
KEY TAKEAWAYS
- Subscription fatigue is when consumers feel overwhelmed and frustrated by the growing number of subscription services and products available to them.
- Signs of subscription fatigue include lower customer engagement, a decrease in product usage, and an increase in churn rate.
- Companies should focus on providing added value and building loyalty instead.
What is subscription fatigue and how does it affect SaaS companies?
Subscription fatigue is a notion of overwhelm and frustration consumers feel as a result of an increasing number of products and services they’re subscribed to.
In 2024, ExpressVPN surveyed 4.000 people across the US, UK, France, and Germany, and the results indicated that almost 40% of them feel overwhelmed by the number of subscriptions they have.
Moreover, the study showed that the biggest problem is the mental burden subscription fatigue creates. Users feel bogged down with managing numerous accounts, remembering passwords, and tracking renewal dates.
Then, there’s the financial aspect — customers’ wallets are cumbered by all those monthly fees for services they don’t even use fully or regularly. This leads them to question whether they need all these products at all.
The situation is particularly challenging for the SaaS industry, as it thrived on the subscription-based model for over a decade:
“From 2012 onward, the playbook was straightforward: create software, implement monthly or annual fees, lock customers into contracts, and watch revenue compound”, João Fernandes, Innovation Specialist at MC Sonae, wrote for Medium.
However, as customers’ habits changed and the market became oversaturated, this approach hit its limits. Fernandes indicates that the main problem in the subscription model is that customer loyalty wasn’t built on the product value, but rather on “the inconvenience of unsubscribing. As a result, loyalty became tenuous, grounded in habit rather than genuine satisfaction, and many SaaS customers began to feel locked in rather than empowered”.
Subscription fatigue became such a problem that US authorities had to intervene. The Federal Trade Commission passed the “Click-to-Cancel” rule, urging all companies, including SaaS, to enable customers to cancel subscriptions as easily as they applied for them — in a single click. The rule will go into effect on May 14, 2025.
How to spot subscription fatigue
According to Zac Stucki, CEO of IgnitionPoint Strategies, companies can assess and predict fatigue by monitoring 3 key metrics: customer satisfaction, user activity, and user engagement:
“Customer satisfaction tells you whether customers believe the product solves their problems and meets their needs. User activity indicates how often they’re using the product. User engagement shows whether the product is a part of customers’ daily workflows and habits”.
Senior Director of Client Success at Aspire Software, Travis Willis, says that declined customer engagement and product usage are usually followed by “a rise in churn rates, increased support tickets related to billing or cancellation, and limited to no customer interest in new training or product updates”. These patterns indicate that customers no longer see value in the subscription.
Further reading
Are you excited about innovations the SaaS industry will bring? Check out this article:
How to overcome subscription fatigue
Our experts say that subscription fatigue happens when costs outweigh the perceived value. They provide advice and strategies SaaS companies can implement to combat this challenge and retain customers.
Focus on quality and value of products
“The days of signing customers and assuming they’ll stick around are over,” says CEO of IT Monks, Alex Osmichenko. He adds that “retention is a fight, and loyalty isn’t automatic. If a SaaS company isn’t proving its worth every month, it’s at risk”.
Therefore, instead of locking customers with subscriptions, companies should focus on providing added value through their products.
“If customers see your tool as a must-have, they will buy it. That means real impact — saving them time, making them money, and solving an actual problem. If a product doesn’t directly connect to business results, it’s in trouble”, states Osmichenko.
Implement a customer differentiation strategy
Stucki advises companies to split the customer base into specific groups. This strategy allows you to define bottlenecks and find the appropriate department to address particular customer needs. He suggests splitting customers by role to:
- “Payers” (who pay invoices),
- “Deciders” (who choose your service), and
- “Users” (who use the product).
“If ‘Payers’ are fatigued, your payment process is likely a hassle. Work with your team to streamline payments and reduce friction. If ‘Deciders’ are fatigued, it’s because they’re not seeing the value or outcomes promised during the sales process. Align your sales and product teams to clarify expectations and bridge the gap”, advises Stucki, and adds:
“If ‘Users’ are fatigued, the product is difficult to use and they aren’t getting the results they need.” In this case, he recommends sharing customer feedback with the product team to improve user experience.
“This role-specific, cross-departmental approach leads to more tailored solutions and stronger relationships”, emphasizes Stucki.
Provide personalized solutions
With the growing offer of tools and the rise of AI, customers expect solutions tailored to their specific needs. Therefore, our experts underline the importance of customization.
“We focus on providing personalized customer success strategies, continuous feature updates, and proactive ongoing support to ensure our clients see ongoing, measurable benefits that justify their subscription and keep them committed long term”, says Willis.
To understand the specifics of what customers need, co-founder of Movadex, Salome Mikadze, advises companies to make the most of data analytics:
“This data is crucial for making real-time adjustments and ensuring the service remains valuable and relevant. Providing a personalized onboarding experience coupled with proactive support has proven essential in building long-term customer loyalty and satisfaction.”
Introduce different pricing models and reward loyalty
To handle growing competition and users’ requirements, companies could optimize the pricing plans, says Jovana Kandić, VP of Product at CAKE.com.
“This could result in an increase in value-based pricing. Value-based pricing is aligned with the value from product usage — the more value users get, the pricier the plan”, she wrote for CAKE.com.
Moreover, Osmichenko advises companies to introduce hybrid pricing:
“Some companies mix one-time fees with subscriptions, so customers don’t feel locked in. Others go usage-based, which feels fairer because you pay for what you use, not a bloated package.”
CEO of Snov.io, Oleksii Kratko, suggests companies should introduce flexible subscription options and free trial periods, and reward the most loyal customers:
“Offer discounts, custom deals, or free trials on new features for those who’ve been with your platform for some time.”
Reshape your subscription strategy to cater to users’ needs
Despite the fatigue, the subscription model isn’t going anywhere, as investors and management love its predictability and lucrativity. However, it does need some tweaks and readjustments.
So, instead of locking customers with monthly or annual payments for software they don’t use regularly, offer them added value and solutions tailored to their specific needs. This will make them stick around because they want to, not because you locked them in.
And, if you’re looking to add value to your business operations for an affordable price, check out the CAKE.com bundle offer. Our Bundle gives you all three products fully upgraded to the highest Enterprise plan.