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Home > Business > HOW TO ENSURE RECURRING REVENUE THROUGH CUSTOMER LOYALTY

HOW TO ENSURE RECURRING REVENUE THROUGH CUSTOMER LOYALTY

Published by Gbaf News

Posted on April 11, 2014

5 min read

Last updated: January 22, 2026

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Martin Moran, Executive Vice President – Global Selling Services, at ServiceSource, offers a three point plan to drive loyalty in a recurring revenue economy

When you hear the word ‘subscriptions’, what’s the first thought that enters your head? Perhaps your thoughts will turn to a favourite personal magazine or newsletter you pay a monthly or annual fee to receive? Or maybe even to an unsolicited email list you’ve asked to be removed from by way of the infamous ‘unsubscribe’ button? The point is that rarely, if ever, do the majority of people immediately link subscriptions with the idea of business success. And yet, for the modern business, the notions of stability, success and subscriptions – or ‘recurring revenue’ – are concepts that are becoming inextricably linked.

Martin Moran

Martin Moran

There’s a very good reason why this is the case, which is that recurring revenue has, perhaps unwittingly, become a staple part of all of our lives. Think about it – all of us, from our own individual tastes in brands, right down to our choice of preferred business supplier, are members of a recurring revenue economy that ties us to specific companies, prices and experiences on a regular basis. Part of the reason why we are so willing to commit to these repetitive cycles of behaviour, is that we are all, as human beings, as well as businesses, intrinsically creatures of habit. When we have a positive experience with a brand, product or service, it leads us to associate it with trust and positivity, which, in turn, leads to us habitually giving them our custom again and again.

Of course, there are subtle differences between committing to a formal subscription to these products or services and between simply giving brands repeat business. However, studies have shown that recurring revenue obtained from loyal customers accounts, on average, for between 30-40% of tech-enabled companies’ revenue and as much as 50% of their profit, so what’s the secret to exploiting this?

Perhaps the most surprising element here is that more organisations don’t set out to capitalise on customer loyalty as a deliberate strategy. One of the principle reasons why this is the case is that the quest for customer loyalty can be a difficult and, at times, unrewarding one, which is not as straightforward and easy as it might at first appear.

There are, however, a number of things businesses can do in order to achieve more success and stability by attracting more recurring revenue through customer loyalty:

The first of these is communication. This may sound logical enough, but frequent interaction with customers is imperative if businesses are to succeed in a subscription economy. It not only demonstrates to customers that you, as a business, care about them, but can also help you to find ways in which you can improve their overall experience. All of which can increase customer happiness and, thus, loyalty. Regular, scheduled check-ins, allied with periodic newsletters can be a great way of making them feel valued and appreciated.
However, one-way communication isn’t enough in itself to ensure customer loyalty. Businesses also have to learn to listen to what their customers are telling them and demonstrate that their attempts at communication are not simply for show and that they really do care. Be sure to take the time to take on board feedback from customers, and listen to how they feel about your product or service. It’s also worth bearing in mind that you don’t necessarily need to enter into dialogue with customers in order to listen to them. Using analytics can tell you as much about the way they behave, their issues, and their preferences as engaging with them on a one-to-one basis. Taking note of these preferences can be a key way to avoid customer churn and ensure customer loyalty on an ongoing basis.
Finally, it’s important to act on the nuggets of information you’ve managed to obtain from communicating and listening to your customers and make changes within your organisation to reflect this. After all, why bother to communicate if you’re not prepared to take firm, decisive action in order to reflect their views? The ability to make active changes that echo the immediate needs of the customer should not be underestimated, and can give customers the reassurance they need that their views are not only being listened to, but also acted upon.

Done correctly, engaging with customers can be a great way of building loyalty and securing recurring revenue. By increasing engagement and creating a positive experience for customers, businesses can create a cycle of habitual behaviour that ensures a stable, regular flow of revenue that could be the difference between success and failure. Subscriptions, and recurring revenue needn’t be seen as negative or a petty concerns anymore. Indeed, with the right approach, they could be the difference between a costly failure and between establishing success and stability for years to come!