Every subscription business earns from a mix of two kinds of customer. The first is glad the order keeps coming. The second has stopped using the product and hasn’t gotten around to canceling. Most programs can’t tell you how much of their revenue comes from each, and the difference decides whether the program is an asset or a liability.

What research says about the second kind

In a study published in 2006, the economists Stefano DellaVigna and Ulrike Malmendier followed 7,752 members of three US health clubs over three years. Members on monthly contracts of over $70 went an average of 4.3 times a month, paying more than $17 per visit when a ten-visit pass would have cost them $10 a visit. When they stopped going, an average of 2.31 full months passed before they canceled, with $187 in payments along the way Published.

Liran Einav, Ben Klopack and Neale Mahoney studied the same thing with card-network data on ten subscription services, from entertainment and home security to newspapers and retail goods, in a paper published in 2025. They used a natural experiment: in the month a subscriber’s card is replaced, any subscription the new card doesn’t reach has to be set up again, which forces a decision. In those months, the drop in retention was four times the normal monthly drop. Their models put total revenue at roughly double what the services would earn if every subscriber paid attention, holding the number who signed up fixed Published.

A card replacement is the moment a subscriber is asked whether they still want you. Plan as if every month were that month.

The most direct test comes from a working paper by Adam Miller, Navdeep Sahni and Avner Strulov-Shlain. A large European newspaper offered 1.4 million readers trial subscriptions, at random either set to renew automatically or set to end unless the reader chose to continue. Auto-renewal produced more paid subscribers right after the trial. Overall it did the opposite: auto-renewal cut the number of readers who took a trial by 35%, and over 20 months it cut total subscribers by 23%. The early advantage faded and reversed after about a year Published (working paper, not yet peer-reviewed). The researchers’ reading is that many readers knew they’d forget to cancel, and so didn’t sign up at all.

Why the second kind is borrowed money

Inertia revenue has three lenders, and all three are calling in the loan.

• The customer. People who discover a charge they forgot about don’t just cancel. They tell friends, write reviews, and call their bank. A disputed charge costs you the sale, a fee, and a mark against your merchant account.
• The card networks. Visa requires express consent, a cancel link and a reminder before any trial or introductory price turns into a full charge Published. And about 30% of the card accounts in Visa’s card-updater service get a new number or expiration date, or close, every year Reported. If inertia is what keeps someone subscribed, the new card is where you lose them, as Einav and his co-authors found.
• The regulators. In September 2025 Amazon agreed to pay $2.5 billion to settle the Federal Trade Commission’s case over how Prime was sold and canceled. The complaint described a “four-page, six-click, fifteen-option” cancellation process Published. States have written cancellation into law. Chapter 7 covers the rules.

None of this means the subscription model is in trouble. It means one way of running it is. The other way, where people stay because the subscription saves them a chore, is getting relatively more valuable as the shortcut closes.

The standing-order test

The phrase comes from banking: a standing order is an instruction to pay the same amount on a schedule until told to stop. Nobody resents their standing orders. They set them up because they didn’t want to remember. That’s the bar. A subscription passes when a customer, asked on the day it renews, would say yes again. Three questions tell you whether yours would:

1. Does it remove a chore?Reordering the heavy bag, remembering the refill, running out on a Sunday. If the subscription removes a task the customer would otherwise do, it has a reason to exist that survives attention.
2. Is the price fair for the commitment?A modest discount for letting you plan inventory is a fair trade. A price that starts low and rises quietly isn’t, and it’s the pattern regulators now look for.
3. Can they bend it without leaving?Skip a delivery, delay it, change how often, swap the flavor, pause for a month. If the only way to adjust is to cancel, customers cancel to adjust.

The rest of this guide is about passing those three, and measuring whether you do.

Do this

• Size your inertia base. Pull subscribers still being charged who haven’t clicked an email, visited the site, logged in or changed an order in 90 days. Opens don’t count, because Apple Mail preloads them. Add up their monthly revenue and divide by the program’s total. That’s the share of the program that depends on nobody asking.