How Inflation is Forcing Subscription Businesses to Rethink Their Offer

How Inflation Impacts Subscription Businesses

As you well know, prices for goods and services can always change. While some rise, some may fall.  But inflation is when there is an overall increase in the price of goods and services over time. Basically, it means you can buy less today than yesterday, reducing the currency's value over time.

Given the recent market fluctuations, customers have less disposable income and often have to reevaluate their spending. These changes are causing SaaS enterprises to rethink their offering to safeguard the future of their business.

The Global State of Inflation in 2022

It’s no secret that prices are soaring in many parts of the world, partly due to the Russia-Ukraine conflict, which has caused a record increase in fuel prices and energy bills. These factors have slowed global growth and exacerbated inflation worldwide. Inflation affects many facets of life, from transport to food costs. Global inflation is projected to increase to 6.7% in 2022, twice the average of 2.9% recorded between 2010 and 2020.

Pew Research Foundation analyzed data from different countries and found that in 37 of the 44 nations surveyed, the average annual inflation rate in the first quarter of 2022 was at least twice what it was in the first quarter of 2020.

According to the latest report from the Bureau of Labor Statistics, the annual inflation rate in the US in May was 8.6%. This was the most significant increase since 1981. In the UK, inflation reached 7% in March, while one in seven adults could not afford to eat daily. With inflation showing no signs of decreasing anytime soon, it’s something that businesses that sell SaaS online should pay careful attention to.

money and people vector image

Effects of Inflation on Customers of Subscription Businesses

The record level of inflation has also had a strong impact on the subscription economy. Subscription companies thrived during the pandemic as customers enjoyed the convenience, safety, and predictability of subscriptions. According to, the average US consumer had five subscriptions by the end of 2021. This is up from an average of two before the pandemic. But the world is facing what Forbes and others have called “The Great Unsubscribe,” as customers feel the pain of rising subscription prices and look to cut costs.

From a business perspective, inflation will cause monthly profits to decline as fixed income from subscriptions might steadily decline. The natural tendency is for subscription companies to increase their products' prices.

As prices increase, subscription-based businesses are often the first non-essentials when consumers are forced to make tough budgeting decisions. A CNBC survey found that 36% of customers will cancel a subscription if higher prices continue, subscriptions could become something to forgo just as cutting back on eating out, driving, and going on vacation are ways to save money. For example, customers may decide that their music or video-streaming app subscriptions are no longer necessary and unsubscribe to cut costs.  As any SaaS company knows, a high churn rate is an important metric to watch and can be the death of subscription services.

6 Ways Subscription Businesses Can Innovate To Combat Inflation-Related Unsubscribes

Since Forty percent of consumers believe they have too many subscriptions, they may well act on this and move to cancel some of them if inflation continues to soar. The Kearney Consumer Institute calls this “the subscription apocalypse”. In that same context, The Financial Times called Netflix the “canary” for this trend, as they lost 200,000 subscribers in Q1 2022.

6 Ways Subscription Businesses Can Innovate To Combat Inflation-Related Unsubscribes

You probably feel very uncomfortable reading these statistics if you have a SaaS subscription-based model business.  But we are here to help with some advice on setting yourself apart from your competitors and demonstrating that your product is worth investing in, securing future revenues. Given the current climate, here are some suggestions for keeping your business relevant during difficult times.

1. Demonstrate Your Value To Consumers

Value needs to be consistent, keeping consumers happy with their paid streaming services. This can be by continually improving your product, sharing informative content, or offering gifts or deals. You want your subscribers to know exactly why they stay with you and what value your product adds to their lives. In short, the ROI is top of mind!

People usually spend their money on needs when forced to choose between a want and a need. Inflation pushes consumers to reevaluate what belongs on their “needs” list, canceling what they no longer believe fits this category. So, your goal is to make your product indispensable to your customers.

To create an indispensable product, start by understanding your subscribers’ needs and preferences. What are their pain points, and how can you solve them? Then, work with these customers to create more value. Simply put, If you continue to innovate and create value, you’ll likely be rewarded with loyalty.

Consumers seek security, relevance, convenience, and purpose from their support businesses. You will probably build long-term relationships, productive partnerships and get paid easier if you offer all these things. 

The model of SaaS businesses is based on recurring payments, so retention is necessary, if not more important, than obtaining new subscribers. Monitoring key metrics such as customer lifetime value, acquisition cost, and churn cost is crucial for your business's health. The longer a relationship lasts, the more valuable it is.  You can read more about reducing your customer churn rate.

Meet PayPro Global.

Keep your business growing with a trustworthy partner.

Trials, pricing models, flexible plans, and complete coupon management, PayPro Global gives you all the tools you need to scale your subscription business effortlessly.

2. Focus on Customer Experience

Make your clients your focus, reimagining your customer-service strategy to focus on their user experience. You’ll gain the ability to better understand what it takes to obtain customer loyalty and SaaS retention. This is a powerful play that requires thought and planning. What are your subscribers experiencing when they use your product? How can you improve this experience for them? You’ll also need to define and monitor your metrics for customer success to determine how your business is doing and then act accordingly as an ongoing process.

Can your consumers see their values displayed in your business? They’ll be looking for emotional intelligence and empathy, especially when times are tough for them financially. If you earn their trust, you are far more likely to retain their business and maybe even get some referrals.

So how do you do this? First off, plan your marketing content carefully. Stay away from bombarding customers with “buy, buy, buy” messages. Of course, gaining revenue is a goal, but you need to approach it carefully. Instead, engage directly with them to find out what they love about your product and how you could improve. Your main goal should be to demonstrate real value. Use individualization and segmentation to increase engagement amongst your existing subscribers. Focus on re-engaging those who have unsubscribed through nurture sequences and promoting items of interest. Make it clear that you care, and customers will likely respond positively.

3. Personalize and Differentiate Your Offering

Personalization at scale, at every touchpoint, is imperative if your business is to remain relevant. According to a McKinsey survey of subscribers, 28% said that a personalized experience was the most important reason for them continuing to subscribe to a product.

To create a personalized experience, you’ll need to understand your product/market alignment and focus on your customers. Create buyer profiles to get to know your ideal consumers and their needs and gear your product towards this niche. Then, market your product so its benefit is clear to your most valuable customer groups. This will keep customers coming back as they will feel like your product caters specifically to them and has real value.

doc sharing vector image

One effective way to optimize personalization is to offer choices. Barry Schwartz’s TedTalks session “The Paradox of Choice” explains that freedom of choice, while empowering, must be approached carefully. Too much choice can leave people paralyzed with confusion. So how does this relate to your business?

Provide a few solid and easy-to-understand options for customers, each targeted at a different segment. If customers are experiencing a problem, they want two or three options to resolve it successfully. Don’t overwhelm them with too many options.

Alternatively, allow your customers the freedom to choose, tailor, or create their subscription package, on a month-to-month basis, according to their needs. Your flexible pricing strategy will lead this process.

4. Optimize Convenience & Save Your Client's Time

As the old adage goes, time is money. The May Subscription Commerce Conversion Index report from says that customers seek “convenience”, defined as meeting their current needs. Many customers prioritize time over money, so ensuring you can conserve customer effort is to your benefit. 

time vector image

Also, according to, convenience and speed are two of the top three competencies customers expect from businesses offering them products or services. They want to be able to find what they want quickly, compare it with other products, and check out in as frictionless a way as possible. Focusing on timesaving measures can help you stay on their “needs'' list as they navigate busy schedules.

5. Diversify Your Offering

Your business will struggle to grow if it only offers one product, and putting all your eggs in one basket can be risky. So, to combat inflation and the resulting unsubscribes, you will need to look at diversifying your product lines. This can be done in two ways: by increasing product-line breadth or product-line depth. Increasing breadth means adding new products, while depth involves expanding on or upgrading existing products. Many SaaS-based companies announce new products and versions of their existing ones, igniting excitement and hype over something new.

Diversifying requires careful consideration of your target market and cautious planning. Ask yourself these questions:

What do customers consistently ask for that your business doesn’t offer?

How will a new product complement our current offers?

Can we upsell/cross-sell this product?

Is this product aligned with our brand?


Once satisfied with the answers to those questions, you can look at the various forms of diversification. You could extend your product line, add new features to existing products for additional usage, extend your target user for a current product, add products related to your overall lifestyle brand image, or upgrade a current product to increase sales.

If done right, diversification can make your product attractive to both current and potential customers. It can also boost brand image and profitability, which is super important in times of economic instability. By innovating, you will bring new and improved products to your customers while keeping them committed to your company

from idea to publishing vector image

Many subscription businesses offer different pricing tiers, which is now more important than ever. Businesses that demonstrate flexibility and understanding of the market will come out on top. Customers want to feel that businesses understand the financial pressure they are facing.

Different pricing tiers will allow your customers to keep using your business while saving money if they need to move to a more affordable tier. The more options you can provide in terms of price, the more likely the customer will stay with you, no matter what the state of the economy happens to be in. It’s vital to ensure you are marketing your lower pricing and the upper tiers. You want your customers to feel they are getting the same quality as those paying for the upper tiers.

An example of this strategy is to offer an option to deliver your product every second month rather than every month. This alleviates financial pressure but gives the customer access to the product and maintains the relationship you have worked hard to build. You could then try to upsell them the monthly offering when the market stabilizes. This strategy reduces customer churn, which is beneficial as it’s more profitable to keep existing customers than the acquisition cost required to attain new customers.

Meet PayPro Global.

Keep your business growing with a trustworthy partner.

Trials, pricing models, flexible plans, and complete coupon management, PayPro Global gives you all the tools you need to scale your subscription business effortlessly.


6. Subscription Models Allow For Smaller Price Increases

Unfortunately, it’s impossible to avoid price increases as inflation will undoubtedly impact your business's running costs. If this is the case, make small changes to your pricing plans, which will feel less dramatic to customers. Keep focusing on bringing in new customers and upselling those you already have rather than making significant increases that can scare them away.

How can PayPro Global help?

With our localized payment strategy, PayPro Global can work with you to keep your product relevant and top of mind to customers worldwide. Our solution allows you to utilize extensive data to keep an eye on the growth of your business. 

We offer complete subscription management, reporting and marketing tools, tax and compliance expertise, and more to help you grow your business. Get in touch with us today to put your business head and shoulders above your competitors. We can have you up and ready to sell software online in no time at all!

Concluding Thoughts on the Effects of Inflation on Subscription Business Offering

Given the impact inflation has on the subscription economy, it is time you started thinking outside the box to secure your revenue. You’ll be forced to search and innovate to keep customers subscribed monthly. Luckily, there are many ways to keep your business relevant, demonstrate value, cater to your customer's needs, and make sure that they keep your product on their list of non-negotiable expenses.


Meir Amzallag

Co-founder and CEO of PayPro Global | Discover a collection of articles on B2B marketing, subscriptions, and e-commerce strategies

Ioana Grigorescu

Content Marketing Manager at PayPro Global | Discover a collection of articles on B2B marketing, subscriptions, and e-commerce strategies

more authors

Know first. Act fast.

It doesn’t take luck to make it, but it does take knowledge. Be the first to learn the latest industry insights and must know marketing tips and tricks. Sign up and enjoy! Always informed. Never Spammed.

Join our newsletter

Subscribe to our newsletter and stay up to date with the latest news!