SaaS and Subscriptions: Shared Secrets to Winning Retention

At first glance, subscription-based products and SaaS might seem worlds apart. One revolves around physical products or media, while the other powers the digital tools we rely on daily. But beneath the surface, both business models share fundamental similarities that product managers can’t afford to overlook.

From retention strategies to customer relationships, SaaS and subscription products rely on shared principles that drive success. Let’s dive into six key areas where these models overlap – and the lessons every PM can learn.

1. Retention Is King 👑

It’s no secret that recurring revenue is the holy grail for both SaaS and subscription products. However, the work doesn’t stop once a user signs up.

In SaaS, keeping customers satisfied and engaged is critical to maintaining MRR (Monthly Recurring Revenue). The same applies to subscriptions like streaming services or meal kits, where retention drives profit far more than initial acquisition.

For product managers, this means your strategy should focus on maintaining value over time. Keep an eye on churn rates and actively deploy loyalty perks, timely reminders, or personal check-ins to maintain user engagement.

2. Hook Them From Day One 🚀

In both SaaS and subscription products, first impressions are everything.

Consider SaaS tools like Slack, which captivate users by showcasing their value within two minutes of use. Similarly, subscription services like beauty boxes often include a “hero product” or first-month incentives to make the experience memorable.

Onboarding is your moment to shine. Reduce friction, highlight value quickly, and make users feel like they’ve made the right choice. Smooth onboarding translates directly into higher user retention.

3. Personalization Drives Loyalty 🎯

In SaaS, Spotify nails this by using behavior-driven algorithms to deliver playlists that feel custom-made for each listener. Similarly, subscription boxes like Birchbox ask users for detailed preferences upfront, tailoring their monthly deliveries to individual tastes.

The takeaway is clear: users want to feel understood. Use data to create experiences that adapt to their needs, whether that’s personalized dashboards in SaaS or tailored offerings in subscription services.

4. Reliable Value, Every Time 📦

Customers stick with products they trust, and trust is built through consistent delivery of value. Whether it’s a subscription box arriving on time or a SaaS platform maintaining 99.9% uptime, reliability is non-negotiable. In both models, even small disruptions – like a delayed shipment or a buggy update – can erode confidence and lead to churn.

For product managers, this means focusing on operational excellence and anticipating potential hiccups before they happen. Keep your service predictable, your quality high, and your users happy.

5. Upselling and Expansion Matter 🛠️

The customer journey doesn’t end with the base offering; growth thrives on strategic upselling and expansion.

In SaaS, companies like Notion master this by introducing team plans and advanced features for power users. Similarly, Amazon Prime bundles services like free shipping, video, and music into one subscription, creating more reasons to stick around.

The goal is to anticipate user needs as they grow. What new features or bundled offerings can strengthen user engagement and loyalty? Expansion strategies are a win-win: they add value for users while maximizing revenue.

6. Feedback Loops Fuel Innovation 🔄

The best products evolve based on user feedback.

In SaaS, tools like Figma rely heavily on their community for feature ideas and iterations. Subscription services, on the other hand, actively seek reviews to refine offerings and improve customer satisfaction.

Your job is to create a constant feedback loop. Don’t wait for users to complain; proactively ask them what’s working and what isn’t. Use that insight to make iterative improvements that keep users engaged and excited.

Two Models, One Goal: Building Lasting Relationships

While SaaS and subscription products might cater to different needs and audiences, the parallels between their business models are undeniable. Both models depend on retention, personalization, and consistently delivering value to succeed. Here’s my take: PMs in each space can learn a lot from one another.

For SaaS PMs, the art of physical subscriptions, like curating monthly surprises or perfecting packaging, can offer lessons in creating delight and emotional connection. Meanwhile, subscription PMs can adopt SaaS’s emphasis on seamless onboarding, usage analytics, and dynamic upselling strategies.

Ultimately, whether you’re designing software or shipping monthly boxes, the shared goal is building lasting relationships with your users. The more you explore what works across these models, the more equipped you’ll be to deliver products that don’t just satisfy but delight.