Leaders of Australian subscription businesses are gearing up for customer churn, with half (49%) expecting their customers to shrink the number of active subscriptions over the next year – well above the global average of 40% – a new report from financial infrastructure platform, Stripe has shown.

The State of Subscription and Billing Management report found that business leaders continue to place a strong emphasis on retaining and growing their local customer base, with 49% stating that retaining existing customers is the most important lever in their subscription businesses, while 42% believe that acquiring new customers is the most important.

With almost two-thirds (63%) of Australian subscription business leaders stating that they were concerned about customers’ increasing subscription fatigue, many are planning to introduce new initiatives in the next 12 months to keep customers coming back, including loyalty plans (47%), free trials (43%) and promotional discounts (40%). In addition, the vast majority (89%) either already offer or plan to invest in subscriptions to a physical product or service.

Of those surveyed, 43% make half or more of their revenue from subscriptions, 50% saw an increase in subscription cancellations in the past year and 43% believe price is the reason customers are ending subscriptions.

According to Stripe managing director for Australia and New Zealand, Karl Durrance, there’s been rapid growth in the number of retail businesses offering subscriptions over the past three years.

“In our report, we found businesses are bullish about the future of these, however, companies need to navigate the cost of living challenges in the near term to lock down stable recurring revenue,” he said.

“Subscription business models are an invaluable way for companies to receive predictable revenue, collate important data insights and strengthen customer loyalty, therefore Aussie retailers are adopting fresh tactics to encourage uptake. These include flexible offerings, personalised plans, loyalty offerings, free trials and promotional discounts to entice customers. It’s going to be a tough ride as purse strings increasingly tighten both across the nation and globally but for those retailers that get it right, they’ll come out on top.”