5 Tips for reducing The Churn of Subscriptions
One of the best things about a subscription program is the steady income that it can generate. However, the most problematic aspect is that a significant portion of this "reliable" revenue is actually quite unreliable. It's true that we're discussing the churn.
Churn can be at any time voluntary (e.g. the subscriber elects to cancel their subscription) or it can be involuntary (e.g. the subscriber did not update their credit card info). Either way, you're out of monthly income you were planning/wishing/hoping to get.
If you're looking to stabilize your monthly income Here are five suggestions to cut down on churn in e-commerce companies.
1. Incentivize Prepayments
Monthly-to-month subscriptions allow your clients the ability to quit at any time this can lead to unpredictable churn for you. Provide subscribers with a discount when they prepay in advance, either quarterly or annually and then you'll be able to have an extra amount of money to count on sooner. Do you have a product that is difficult to reduce? You can try other options for example, offering a complimentary month or special features for members who prepay.
It's much easier to plan the regular income from prepaid subscriptions than the unpredictable earnings that come from your monthly subscribers. Consider putting part of your income from prepaid subscriptions towards the acquisition of customers to buffer your monthly churners.
2. Automate Dunning
Automate management of dunning in order to minimize passive churn. Dunning refers to the method of contact with customers with late accounts. The subscriber may have failed to make the payment due to the credit card expires and was lost or cancelled regardless of the reason. they failed to correct their account information, resulting in an involuntary dunning.
These people may still want to use your product, they're just totally unaware that their payment method has been unsuccessful. But do you have the resources to individually email and/or call each failed payment? Probably you don't. For B2B companies, 9 percent of monthly recurring credit card transactions do not succeed on average. However, for B2C firms, the figure is higher at 14 percent.
This is where the automated dunning service can help. There are many dunning solutions that will automate emails to help recover missed payments and subscribers who have been lost. A dunning service may begin by sending your customers with unsuccessful payments an email such as "It's not us, it's us" that reminds them to change their payment method and direct them to a secure website prior to moving on to more serious messages.
When you've got an advertising campaign which is consistent with your brand it'll be running behind the scenes to help to reduce the amount of churn you experience while you focus on other efforts.
3. Survey Churners
Wondering why people are canceling their subscriptions? Ask them. Contact customers who recently stopped churning to find out the reason they have stopped using your products. It can be included on your cancellation page or provide a link to a survey via an email.
What's the worst that can happen? It's already over at the very least. The best scenario is that you find out what caused them to cancel and you resolve the problem and prevent future churn.
4. Let Subscribers Skip & Pause
Sometimes people just want a little wiggle room. If your standards for subscriptions are strict, it shouldn't surprise you if subscribers abandon the plan when they encounter surprising events at their doorstep... or in the event that a competitor arrives with a comparable plan that's more accommodating.
Letting subscribers skip a month or put their account temporarily suspended for three months will help you keep customers who enjoy working with you but need to take a break due to any reason. It's also something you can advertise to give potential customers confidence. They may never need to pause or skip a step, but they'll feel more confident about committing to your company having that choice.
5. Honor Loyalty
The loyalty programs can reduce the rate of churn through making clients feel apart of something exclusive. Create a loyalty program that gives your most loyal, reliable members a name that is fun. It is possible to reward them by offering incentives such as sneak peeks at new features and exclusive merchandise, as well as in-person meetings and even discounts at your partners' businesses.
Studies have shown that participants of customer loyalty programs generate between 12 to 18 percent more revenues, meaning longer subscription times and less turnover. Find out how much it costs you to acquire a new customer, and then create an incentive program for loyalty that is priced less per client, but keep customers happy for longer. It also generates more predictable income and stimulates positive word of mouth marketing.
Conclusion
Every business is subject to turnover. You can't stop it, however, with these strategies to cut it down and improve your chances reduce your churn percentage less than the industry standard.
