3 kinds of subscribers you want to let go

Know when to retain members, and when to let them go

I'm thinking of starting a movement, make retention sexy, but I don't know if anyone will buy the t-shirts. Retaining existing members is way more important than acquiring new ones. Most executives and entrepreneurs paid lip service to this fact, but then focus all of their attention to net new customers and new logos to brag about. But here's the thing. In the first few months of nearly any membership, the company is losing money when cost to serve and acquisition costs are factored in. It's only the members who stick around that are profitable. So, how do you make sure your members stay? 

Make sure you know who you serve best.If you don't know, don't bother investing in acquisition at all. 

Track engagement. If they aren't coming in or logging on, they're probably not finding value, and somebody not getting value is likely to cancel. Don't confuse inertia with loyalty. 

Use best billing practices. Too many members are lost due to passive churn. A credit card expires. An address changes. There are loads of software to service apps that can help you with this, such as Zuora, Vindicia and Aria software.Check them out. 

That being said, not every customer is a customer worth keeping.

Sometimes, the best way to grow your business is to pare it down first. It's like pruning a tree to grow more fruit. Think of it in three categories:

1. People who want to leave. If people really want to go, let them go. That's important. Don't hide the cancel button or make them talk to five different levels of customer service before canceling the account. If you do, you've lost that customer forever. Not only that, but you've increased the likelihood that they'll tell all their friends how sleazy you are.
2. People who are a drain to the community. There might be some members that you don't want anymore, such as the ones that complain constantly that you aren't meeting their needs, or the trolls on your digital community. At some point, you might just tell them politely that they're right and they might be happier elsewhere. You should also thinking about paring down the segments that you serve. 
3. Segments that don't align with the future of your business. Subscriptions are for the long term and sometimes people who sign up aren't really a fit--they are going to want features and enhancements you're never going to make, because you're moving in a different direction.

For example, when Adobe moved from physical boxed software to a subscription SaaS model, most of their customers, who were professional designers, were thrilled with the new more sophisticated offering, but for a smaller set of hobby designers who were using Adobe for personal projects, the new pricing was prohibitive.

Adobe let them go, making the decision to optimize their experience for a specific group of members rather than trying to please everyone and failing with all of them. Here are two exercises to help you think like this too. First, what can you do to improve retention? Can you improve your billing system or track engagement and intervene appropriately? These two kinds of adjustments are often really simple and can make a big difference in your numbers. Second, also ask yourself which of your members are the ones you want to replicate, and which ones are a drain on your system? Write up a description of each and share with your team.

Once you're focused on who you best serve, you can really focus your program. Retention is the key to the forever transaction. Keep an the eye on the members you have, and you'll be likely to find that those happy members end up becoming your best source for acquisition.

Robbie Kellman Baxter is the founder of Peninsula Strategies LLC, author of The Membership Economy, and and a LinkedIn Learning course author.

Her clients have included large organizations like Netflix, SurveyMonkey, and the National Restaurant Association, as well as smaller venture-backed start-ups. Over the course of her career, Robbie has worked in or consulted with clients in more than 20 industries.

As a public speaker, Robbie has presented to thousands of people in corporations, associations, and universities. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business.

Robbie has co-created several Lynda/LinkedIn Learning courses including Becoming an Entrepreneur Inside a Company, CMO Foundations, Networking for Sales, Business to Business Sales, Customer Success, Business Development, Create a Membership-Based Business or Develop a Service Orientation. 

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Find Robbie on Twitter, @robbiebax.

Contact Robbie at [email protected] to set up a complimentary call and find out how she works with companies.

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