Sales and marketing alignment · Episode 38 · Season 3 · ·
The Untapped Creative Potential in Subscription Business Models
Lina Tonk, CMO at Recurly, on why the subscription economy is far more creative than anyone expects, what airlines experimenting with bag and seat subscriptions reveals about where every business is heading, and why retention is the most underinvested lever in subscription marketing.
Lina Tonk, Chief Marketing Officer, Recurly. In conversation with Justin Cooke.
The Untapped Creative Potential in Subscription Business Models
0:0037:00Why subscription management is a creative discipline and why airlines show where every business is heading
Lina Tonk spent nearly a decade in HR tech before joining Recurly, the leading subscription management and billing platform. Her decision was driven by falling in love with the product and seeing a market expanding far beyond streaming into airlines, healthcare, and retail.
In this conversation Tonk describes what the creative possibilities of subscription models look like in practice, why loyalty and retention are systematically underinvested relative to acquisition, and how CMOs with sales experience develop a different relationship with revenue accountability.
Tell us about Recurly and what drew you to subscriptions
“I fell in love with the product. I wanted to find a product we could really expose to the world globally. The subscription market had so much to unlock. Most people think subscriptions and think streaming, but it is everywhere now.”
Genuine product conviction is Tonk's starting point. Marketing something you believe in produces better outcomes.
How are airlines using subscriptions creatively?
“I was just off a meeting with airlines trying to unlock future revenue through subscriptions. Subscriptions for bags, loyalty programmes, seats. Alaska Airlines just acquired Hawaiian Airlines and the creativity they have deployed while running subscriptions with us is one of the coolest things I would say about this space.”
Subscription models allow industries to generate predictable revenue from what was previously transactional.
Why is retention the key lever?
“Every subscriber you retain is revenue that does not need to be re-acquired. The cost of re-acquisition is always higher than the cost of retention. Most subscription businesses spend more on acquisition. That is almost always the wrong ratio.”
Tonk is making an argument most subscription marketers agree with intellectually but few organisations resource correctly.
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Become a Voice →What did your brief stint in sales teach you?
“I spent a short period in sales. I lost a bet. But it gave me a great view of how sales feels about their roles, what they go through, how they carry a bag. Probably one of the reasons I work so well and closely with CROs today.”
The sales experience created empathy with the commercial function that changed how Tonk approaches marketing.
What does great subscription marketing look like?
“It is data-driven and close to the customer. The subscription relationship does not end when someone signs up. That is when it begins. You have to design marketing that serves every stage of the lifecycle, not just the acquisition moment.”
A lifecycle orientation distinguishes subscription marketing from one-time purchase marketing.
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Read the full transcript
Lightly edited for readability
Justin Cooke Tell us about Recurly and your role.
Lina Tonk Recurly is the leading subscription management and billing platform. I fell in love with the product. The market is far more creative than people expect. Most think subscriptions means streaming. But I was just off a call with airlines doing bag subscriptions and seat subscriptions. The creative potential is enormous.
Justin Cooke Why is retention the key lever?
Lina Tonk Every subscriber you retain is revenue that does not need to be re-acquired. Re-acquisition always costs more than retention. Most subscription businesses spend more on acquisition. That is almost always the wrong ratio. Loyalty is where growth compounds.
