Student offers are fast becoming the norm in the subscription economy, and for good reason. College students are a perfect customer group for streaming media companies to target, but their disposable income is usually limited. Price can make or break their decision to sign up.
That’s the feedback SoundCloud heard in its community forum: for some students, cost was the “only thing holding them back.” Smart brands listen to their customers, and SoundCloud was poised to deliver.
Meeting Student Expectations
With 175 million registered users, SoundCloud is the world’s largest music and audio platform. And since its launch in 2008, the company has maintained a competitive edge as the only service where artists and fans can interact.
This open platform model that connects creators and consumers across the globe is part of SoundCloud’s appeal to younger listeners. Not only do Millennials listen to 75% more music than Baby Boomers, but they’re also trendsetters steeped in social media. They’re interested in spending time scanning their SoundCloud feed to be the first to discover, promote, and share the newest tracks as soon as they’re uploaded.
To deliver on the expectations of this important customer segment and keep them loyal to the service, SoundCloud decided to implement a gated, exclusive offer for students.
Using Gated Offers to Convert Student Subscribers
In March 2019, SoundCloud launched a gated offer that gives students 50% off the company’s top-tier subscription. For only $4.99 a month, students can access SoundCloud Go+ and all the benefits that come with it, including ad-free listening and access to SoundCloud’s full catalog of more than 200 million tracks.
The gated offer is both a boon to students and a smart customer acquisition strategy for SoundCloud, as it gives the company a highly effective tool for converting students who use the free version to subscribers who are able to pay for premium services.
According to our consumer survey, 91% of students said a gated offer would make them more likely to shop with a brand. Gated offers also influence purchasing behavior, motivating nearly three in five consumers to purchase sooner. This makes sense, as gated offers spur emotional connection: when provided a gated offer, 54% of consumers report feeling rewarded, 47% feel excited, and 35% feel special.
Setting the Stage for Long-term Subscribers
To ensure only those eligible for the student discount are able to redeem it, SoundCloud implemented the gated offer with SheerID’s Digital Verification Platform. Students attending an accredited college or university full-time can simply enter a few pieces of information, including email and school, and their status is instantly verified. Even students who are already subscribers can take advantage of the gated offer.
Verified students receive the discount for 12 months, at which point SoundCloud invites them to reverify their status (if they’re still a student) or convert to full price.
The secure verification process prevents fraudulent redemptions, which can be as high as 35%. It also occurs as a seamless part of the transaction and gives SoundCloud the opportunity to nurture students’ use of the platform so they happily become full-paying subscribers when they graduate.
The Power of Nurturing Student Subscribers
SoundCloud’s launch of the student offer generated significant buzz. Top media outlets like TechCrunch, The Verge, and Digital Music News recognized the company for meeting student demand. And Digital Trends confirmed launching the offer was a smart move, saying it was “a good way to bring new paying customers into the fold, and the demographic is a perfect fit for SoundCloud’s artists.”
The strategy gives SoundCloud access to a lucrative segment, a whopping 180 million college and university students around the world who have $574 billion in spending power in the US alone.
But the program’s value doesn’t stop at customer acquisition—SoundCloud knows that getting younger users hooked on their product early is an investment in the future.
College students have a 10-year customer lifecycle preference, and 60% of Millennials who are out of college and now in the workforce said they are “often” or “always” loyal to brands they currently purchase. On top of that, our consumer survey showed that 83% of shoppers 18-26 (read: university students) would share a gated student discount with friends and family.
SoundCloud makes it clear that these students are integral to the platform, and using gated offers taps into their desire to be part of a growing and vibrant community. This includes messages like “Flex Your Student Status” and a promise to students that by upgrading their subscription, they’re directly supporting the millions of creators building their careers on SoundCloud. That’s a call to action that’s easy to get behind: what student wouldn’t want to be a part of shaping the future of the music industry?
Expanding the Customer Acquisition Impact of Gated Offers
SoundCloud’s gated offer is available to students in the US, UK, Ireland, Australia, New Zealand, Canada, Germany, France, and the Netherlands. Since SoundCloud is available in 190 countries, Digital Music News projects that “there’s a lot of room for growth if the program proves successful.”
An integral part of the internet-era music industry, SoundCloud continues to innovate. And as SoundCloud evolves, so can its gated offer program. SheerID’s international student verification is available in 108 countries—and counting.
How Gated Offers Benefit Top Subscription Brands
Driving conversions and loyalty with gated offers isn’t limited to the student segment. Within a year of launching a gated military offer tied to the MyLowe’s loyalty program, Lowe’s enrolled millions of veterans and saw a 2x increase in repeat purchases among the military.
Brands in the subscription economy are also on board with gated offers:
- To acquire new subscribers, Comcast offers a student deal for 25% off Xfinity TV bundled with an internet package.
- CBS All Access is fighting churn—one of the biggest obstacles subscription companies face—with a gated offer of 25% off for college students.
- Kettlebell Kitchen differentiates its meal subscription services with a 15% discount for members of the military and first responders.
- Headspace makes its meditation app more accessible by providing year-long subscriptions to students for $9.99, and to teachers for just $12.
Like SoundCloud, “Having student-specific pricing was one of the most requested points of feedback our customer experience team received over the years,” said Keya Patel, growth product manager at Headspace. “We were looking for a strong verification platform that allows us to seamlessly embed student verification into our existing checkout flows with technical support when we needed it. SheerID gave us this and more.”
Subscription companies using SheerID to verify student status consistently report conversions to full price at rates as highs as 98%. Brands also report 3x conversions and ROAS as high as 20:1.
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