Dose #68: Top 3 Ways to Fight Churn
Matthew Holman
Fractional Subscription Leader | Weekly Subscription Tips --> Newsletter + Podcast | Commerce Catalyst Community | Partnerships @QPilot
Matt here with your weekly Subscription Prescription ??
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Dose #68: Top 3 Ways to Fight Churn
This week’s dose is all about what you can do to effectively fight churn. We’ll start with offers you can use to keep subscribers around longer, dive into acquiring more subscribers that are a better fit for your offer, and finally, cover ways you can make subscribers more profitable.
Each week when trying to come up with great content for this newsletter, I almost always come back to the biggest question on everyone’s mind: how do I keep subscribers around longer?
In this week’s dose, I will walk through the 3 approaches you can take to keep subscribers around longer and drive up that blessed LTV with offers to keep subscribers happy, acquire better subscribers, and make each subscriber more profitable.
Offers To Keep Subscribers Happy
You’re likely already considering the best offers to keep subscribers around longer. So, let me go over a few best practices and then throw some ideas your way.
First, if customers don’t know they have something special coming, then there’s a good chance they will still cancel if they’re likely to cancel. You need to let them know that something is coming their way.
Second, instead of thinking through massive offers you want to send to everyone, implement a cancellation survey/winback tool. This lets you get specific with your offers based on customer needs. For example, a customer that likes your product but doesn’t need it anymore might be willing to gift their subscription to someone else.
Third, many cancellations happen around the upcoming order notifications you send out. Because of this, many brands I speak with aren’t sending text notifications anymore. Many aren’t doing email, either. If you are sending them, instead of suggesting someone cancel, look at this as an opportunity to reinforce the brand, experience, and benefit customers see from the subscription.
If your brand has a cause, mission, or just a general vibe this is a great place to reinforce that. Remind someone what they’re getting and why.
Some offers you can consider using here include:
As always, spend time understanding what is going on for customers trying to cancel. Getting deeper into the WHY will make your offers more effective and play nicely into the second approach to reduce churn.
Acquire Better Subscribers
The most impactful thing you can do to keep subscribers around longer is to test more to find a better product-market fit. This means you use different ads, messaging, and channels to find subscribers that will find your product more valuable.
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You can research the longest subscribers you have to find things you can use to target more customers like them. This includes demographic information like age, location, and income; information related to benefits they see, the problem you’re solving (as they see it); and just understanding what aspects of these customers you should seek out in acquisition.
Another data point you can rely on comes from post-purchase surveys. Asking customers what made them purchase (as a very general example) will give you insights into how you can acquire more customers like them. With a longer life cycle of subscribers that initially took a post-purchase survey, you can tie those reasons back to those that last longer than average.
Ultimately, you want to test more creative, test your offer, and sometimes change how you’re positioned against competitive products so that the value you give is higher. Customers that see great value will stay on a subscription longer.
Make Each Customer More Profitable
Whether you can keep them around longer or not, extracting more value from each subscriber should be a priority. Let’s review common upsell opportunities and how they work best with subscriptions.
Post-purchase upsells are popular and something I’ve covered in a past dose. You can offer supplementary products (think pet treats to go with pet food or an eyelash curler with eye shadow), top sellers from your site, or a mystery gift.
Once the subscription starts, remember that until the customer has seen benefits from using the product, it may be easier to upsell to them effectively. You should look at month 2 or month 3 for new or additional upsell offers. You can use product inserts, product samples, or full-size products for a physical interaction that transcends digital ones like email or text.
For anyone working to reduce churn, I suggest working more to understand what subscribers are expecting and what they are getting from the subscription before starting to throw offers out there. Once you have some insight into that, making better offers on the retention and acquisition side makes a lot more sense. Ultimately, you need a firm offer before you can start making too many upsells or figuring out how to boost AOV on each order.
Those are the upsell basics. The real opportunity with subscribers is finding more offers you can make to them. Is there a digital subscription that aligns nicely with your product? Can you offer more exclusive product drops??
The goal is to understand better what customers want and hope for and then deliver that to them. You can establish trust with a leading product and upsell additional ones.
Pay attention to signals that more valuable customers send you early on. Is someone that subscribes after ordering 3 times more likely to last longer on a subscription or less? Are certain products or bundles stickier as subscribers? Looking into your data to find these trends will let you craft experiences for those valuable customers (this is content I’ll be writing more about soon, so stay tuned!).
That was a lot of this week’s dose, but I hope you found something useful. If you have a problem with your churn, hit reply and let me know what’s going on. I’m happy to provide some insight.
Stay tuned for Dose #69 next Tuesday!
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- Matt Holman ??
Head of Partnerships, QPilot