Squarespace Goes All-In on Subscriptions

During our recent investor roundtable, Omers Ventures’ Michael Yang made the observation that there’s a noticeable uptick in subscription businesses. It’s all about retaining customers with a recurring billing cycle and deepened relationship — not a new principle but one that’s surging.

The latest company to join this trend is Squarespace. The website builder now offers its customers the ability to offer their audiences subscriptions to premium content. This can be everything from fitness classes, to paid tiers of an online publication, to any sort of “members area.”

This joins existing Squarespace offerings for various forms of eCommerce, payments and appointment scheduling. Now Squarespace customers can set up gated areas of their site, then assign different rules to who can access them — whether that’s paid access or free registrations.

Squarespace also offers the ability to create different tiers of access and pricing, as well as features that go beyond page access — including paid newsletters or podcasts. All of the above comes with analytics and CRM features to examine data about subscription customers or members.

As for pricing and roll-out, the new functionality starts at $9 per month. One of the benefits is the ability for existing Squarespace customers to turn this on easily, then start creating protected pages. It also could attract more monetization-oriented customers to Squarespace for the first time.

Localogy M&A Roundtable: iHeart, Endurance & eCommerce

Longitudinal Customer Relationships

Squarespace has already taken steps towards eCommerce, as noted, as have other website builders examined in our Website Windup series. But this latest move expands that eCommerce play to include recurring service, or “longitudinal customer relationships,” as Omers Ventures’ Yang puts it.

This move also follows industry standard, as Squarespace competitor Automattic did the same thing exactly a year ago. As we examined at the time, it launched subscriptions for WordPress sites. This includes native functionality for recurring payments and subscription customer management.

Panning back, these moves represent a few things. First, it’s about meeting the moment for eCommerce growth, given retail lockdowns. This is especially the case for SMBs with hard goods that they need to keep moving. But it’s also about the ongoing expansion of the website-builder bundle.

The thought behind the latter is that a more expansive bundle means a greater addressable market, and potentially-deeper relationships on a per-customer basis. The latter can boost key metrics such as average revenue per user (ARPU), annual recurring revenues (ARR) and lifetime value.

Lastly, Squarespace’s subscription play is the latest move that validates our 2020 prediction (below) about the expansion of the website-builder bundle. For all of the reasons above — and factors we didn’t anticipate during pre-covid predictions — all signs point to ongoing expansion.

Website Builders Continue to Broaden Functionality: As the website sector in general matures, there’s less growth so competition intensifies for market share. The result is a spate of moves in the past six months to beef up their bundle of services with more functionality to attract customers and reduce churn. This has ratcheted up as website builders like GoDaddy, Automattic and others are rapidly expanding (though building and buying) to offer marketing and promotion, in addition to the core “presence” functionality of websites. That will continue into 2020, with feature expansion that most prominently includes email marketing, SEO and CRM. 

This is the latest in Localogy’s Website Windup series. It examines the ongoing evolution and advancement of SMB-focused website builders, including acquisitions and feature expansion to enhance product bundles.

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