In 2025, subscriber growth is no longer just about who can acquire faster. It’s about who can hold on longer.
Customer acquisition cost (CAC) has skyrocketed across paid channels, while engagement fatigue and subscription saturation make net-new conversions harder than ever. For growth executives at subscription brands, that means one thing: the best ROI is coming from retention-focused strategies, not traditional acquisition spend.
Here's why the shift is happening—and how leading brands are adapting.
In early 2025, average CPMs on Facebook and Instagram are hovering around $7.75, while cost-per-click rates have pushed past $0.90. TikTok and Snapchat have seen similar jumps, with Snapchat CPMs up 27% YoY. Meanwhile, the average CAC for digital media and entertainment brands is now estimated between $200–$300 per subscriber, depending on offer structure and attribution model.
At the same time, conversion rates from free trials to paid subscribers are falling, and audiences are growing more selective. Subscription fatigue is real. In a Nielsen survey from Q1 2025, 61% of respondents said they were actively trimming the number of digital services they pay for.
Takeaway: Spending more to earn less loyalty isn’t sustainable. Retention is the lever with better economics.
Holding onto a subscriber costs less and pays off more. Recurly’s latest retention benchmark report found that subscription companies using pause features and loyalty incentives were able to retain over 50% of customers at risk of churn.
Meanwhile, bundled services and loyalty perks have shown strong results across verticals:
NYT + The Athletic Bundle: The New York Times' bundled digital offer with The Athletic led to a 10% higher retention rate for subscribers on the bundle compared to standalone products.
T-Mobile + Netflix/Hulu/Apple TV+ Offer: By bundling top streaming services into mobile plans, T-Mobile not only boosted mobile retention but became a distribution channel for those media brands.
HelloFresh loyalty incentives (free box after 12 months) drove a noticeable lift in customer lifetime value, with the company reporting a 7% lower churn rate among loyalty program members.
Takeaway: Flexible pricing, loyalty tiers, and value-stacking through partnerships or bundles all materially improve retention ROI.
What does a retention-first strategy look like in practice?
Personalized Bundling: Platforms like SubSuite allow brands to collaborate and let subscribers build their own "DIY bundles." This drives both upsell and stickiness.
Loyalty & Milestone Rewards: Tiered discounts, free gifts, or bonus content for renewals or referrals create motivation to stay longer.
Data-Driven Win-Back Flows: Top brands use churn prediction models to trigger personalized win-back campaigns, pause options, or re-engagement content.
Flexible Plans: Giving users the ability to pause, skip, or switch tiers reduces involuntary churn and increases satisfaction.
Recurly reports that 71% of subscription businesses now offer both monthly and annual plans, with annual subscribers churning at less than half the rate of monthly users.
Here’s how to put this retention-first strategy to work:
Audit Your Churn Drivers: Where are you losing people? Involuntary churn, poor onboarding, or lack of perceived value?
Launch a Loyalty Perk: Even a small benefit (e.g. 10% off after 3 months) can move the needle.
Test a Bundle or Partner Offer: Collaboration reduces CAC for all involved. SubSuite, for instance, lets subscription brands co-promote to one another’s subscribers.
Improve Pause Options: Don’t lose customers who just need a break. A "pause" button can cut churn by 30% or more.
Invest in Personalization: Use subscriber data to suggest add-ons or tailor offers. Relevant = retained.
The new ROI formula for subscription brands in 2025 is clear:
Lower CAC + Higher Retention = Sustainable Growth.
Growth execs who lead with retention strategies—rather than chasing scale at all costs—are the ones seeing better margins, stronger lifetime value, and more loyal communities.
If you're looking to increase LTV and reduce churn while still growing your base, SubSuite can help. Contact us to learn how to turn your existing subscribers into a referral engine, bundle builder, and loyalty army.
