After months of hard work, we’re excited to launch our new, improved churn suite — building on our initial set of features launched back in 2020.

The original features that made up the Churn Optimization Suite include:

  1. Cancellation reasons: understand why your customers cancel
  2. Cancellation insights: understand when your customers cancel for specific reasons
  3. Automations: leverage the knowledge gained from cancellation insights to create loyalty programs or increase perceived value through timely communication
  4. Custom dunning sequences: through the Automations feature
  5. Cancellation offers: give special offers based on the customers reason for cancellations at the time of canceling
  6. Commitment periods: get your customers to commit to a period of time before they can cancel

So why is this important? For subscription businesses that prioritize recurring revenue and an unending, always-improving customer journey, churn is a crucial metric to track. In some cases, a decrease in churn by 0.1% can be more profitable than a long-term 10% decrease in customer acquisition cost. When you’re just starting your business, this may not seem like a big number, but over time, it really adds up.

The thing is, churn doesn’t just happen for no reason. Just imagine if all of us had to subscribe to access fresh air. Who would cancel it? Correct, nobody. Hm, unless there is another company selling it cheaper…

Therefore, the first thing you need to know about churn is that there is always a reason for it!

Before you start creating a strategy to tackle churn, you need to inform yourself. Proactively talk to your customers to figure out how their experiences are going and identify their concerns. 

Once you’ve got a list, then you can start prioritizing what to address first. If it’s too difficult to deal with immediately — perhaps a bigger project, like adding their preferred language for the customer portal management — you always can start with a simple gesture, such as providing a generous coupon for other products, and let them know you’re working on it.

To reiterate, rule #1 is to proactively talk to your customers to figure out possible reasons they might want to leave, before they actually do it. It may seem like you don’t have time for it, but once you realize the positive effects of spending at least a couple hours a week talking to your customers, you’ll find yourself making the time.

Obviously, no business can get to 0% churn — the industry average is actually 9.5% — but subscription businesses are all about the relationships you’re building with your customers. The better their experiences, the lower the chance they’ll leave after all. 

On a basic level, this is about providing robust customer communication. Configure your emails to answer all of your customers’ questions. Create an explicit, well-signposted FAQ on your website. Thoroughly explain all the details of your offerings, updates, box contents, etc, — once you’ve covered the fundamentals, you can focus on going over and above to delight customers. 

Use automation to handle recurring tasks, such as providing a free coupon or other products right after a purchase. Once a subscriber reaches a certain amount of purchases, or has stuck around for 6 months or a year, apply a free balance a cycle before or put a free item in their box. Test which ones work better for your unique business context, and definitely make sure you let them know ahead of time to expect their reward.

Rule #2, on the other hand, is to build relationships. Properly automated communications make this a much easier goal to achieve.

Customizing cancellation offers, for example, is a great way to build trust and reduce voluntary churn. An automated message could communicate to customers to:

  1. Increase or reduce the frequency of their deliveries
  2. Receive a discount if they feel it’s too expensive
  3. Pause their subscriptions when they’re going on vacation
  4. Notify them that they’ve had a balance or a coupon added to their account
  5. Offer customers a discounted plan in return for a long commitment period.

Involuntary churn, on the other hand, can be combated by custom dunning sequences and a bit of technical tinkering. Here’s some ideas:

  1. Preemptively send reminder emails (possible on some platforms using built-in functionality) before cards are set to expire.
  2. Make it easy to update payment details, i.e. make sure you have failed payment emails enabled.
  3. Set up your subscription so that customers whose payment methods fail or expire during a given billing cycle don’t lose their accounts, and can receive their next shipment with no interruptions as long as their payment details are updated before the next billing attempt.. Don’t cancel when dunning fails.
  4. Set up a friendly and encouraging dunning process that emphasizes the advantages of resolving any payment issues while still giving them a finite amount of time to do so.
  5. Update the cart abandonment sequence schedule to daily. Make sure you try again the same day – automations make that possible.
  6. Use SMS messages! Send them as frequently as every day, but make sure to frame them as just a system notification that payment failed in order to not seem too pushy.

With this powerful set of churn tools at your fingertips, you’ll be able to develop an almost omniscient ability to sniff out any problem or concern before it becomes a major issue — and nip all those behind-the-scenes pain points in the bud before they bloom into long-term issues.

But wait, there’s more…

Minimizing churn is only one part of unlocking subscription business growth — and it takes time to experiment and find what works for your unique business model.

We’ve made it easier to follow in the footsteps of giants with our new subscription scrapbook, containing 100+ tactics and strategies inspired by some of the biggest subscription businesses in the world.

The scrapbook contains everything you need not just to combat churn, but also to unlock tons of new avenues for growth and revenue — and will be continually updated to make sure you’re never out of fresh ideas. Subbly users can click here to find out more.

By Zaki Gulamani
Editor-In-Chief at Subbly