If your e-Commerce website offers a subscription element such as a monthly club or automated product delivery, then you probably already know that reducing churn is an important way to increase your profits.
Recurly’s research finds that most businesses have an average churn of 5.6%. Although this amount can be higher for consumer products and depends heavily on the industry.
You can calculate your churn by taking number of customers who canceled their subscription / total number of customers who have a subscription. We recommend tracking and calculating this amount on a monthly basis.
Now that you know what churn is, let’s take a look at a few ways to reduce churn. By making improvements to your website’s UX, sending follow ups to segmented customers or offering bonuses for subscription milestones, you can reduce churn and increase profits. We’ll also review how to implement these optimizations using Recharge, one of the most popular subscription plugins for Shopify.
1. UX Improvements for Account Subscription pages
Poor or frustrating user experience can result not only in the loss of an initial sale but also in the long-term loss of a customer. Let’s use this customer story as a quick example:
Dan is currently subscribed to a men’s grooming delivery service. Each month he receives a shipment with a hair wash product. However, next month he’s going to be traveling and wants to delay his shipment until he returns.
Logging into the website he sees the following:
Since there is no clear or obvious way for him to delay the shipment he just goes ahead and cancels the subscription.
Out of the box, many subscription services have a My Subscription page that look similar to this. In this case we’re using an example from a site using the ReCharge platform.
However, ReCharge actually does have the functionality to allow a customer to change their next shipment date—the problem is that it’s hidden behind the Edit link.
The fix here is simple: instead of including a single Edit link for the subscription, break out each of the actions that a user might want to take into individual buttons. That way, you give the user a clear path to finding where to pause, skip a shipment or take other common actions. This in turn helps the user skip a shipment instead of just canceling.
Here’s an example of an updated page:
2. UX Improvements for Product Changes
If you sell products with an option, it’s important to allow customers to be able to easily change their product selection. User flows which force users to create a new order and cancel their previous subscription take time and often encourage the user to simply unsubscribe completely rather than just making a simple update. This is especially true if you sell a product that comes in different varieties such as flavors or scents.
Thankfully ReCharge includes this ability with their platform; it simply needs to be set up in your account. Just head into the plugin settings and under the customer portal make sure you have the following setting enabled for both store owner and customer:
3. Getting Ahead of Expiring Cards
Dealing with expiring credit cards is a normal part of the subscription life cycle. However, there is more you can do to help ensure that your customers enter their new credit card ahead of their old one’s expiration.
You’re probably already sending out reminder emails letting your customers know that their card will be expiring next month. If you are not this is a great notification to implement to reduce churn.
Let’s say that you already have these email notifications going out. What else can you do to help ensure that your customers enter their new credit card? One great tactic is to offer an additional discount or free item when they enter their new card. By giving them an additional incentive to log in and enter their credit card you can reduce your churn and re-engage your customers.
4. Segmenting Subscriptions & Upselling
Another great way to reduce churn is to give your subscribers more items to subscribe to and use their existing subscriptions to introduce them to the appropriate new products. For instance, let’s say your company sells a line of hair care products. You can segment your subscribers to see who is subscribed to your shampoo but not to your conditioner, then offer these customers a free sample or discount to subscribe to the conditioner on top of their existing subscription.
Don’t feel like this tactic works for your business? You might be surprised to know that even if you only offer one subscription product, you can still upsell your subscribers. Take for example a list of customers who have been subscribed for 3 or more months. Instead of upselling them additional items, you can upsell them on an upfront purchase at a discount. Just send them a notification letting them know they’ve been subscribed for 3 months and for an additional 10% off they can pay up front for the next 3 months.
According to a survey by McKinsey & Company, “more than one-third of consumers who sign up for a subscription service cancel in less than three months, and over half cancel within six”.
By targeting your subscribers at the 3- or 6-month mark with an additional upsell or offer, you can help keep them from hitting the cancel button when they are most likely to do so.
5. Rewarding Your Subscribers!
Always remember that your subscribers are saving you money and they deserve to feel that gratitude for their loyalty returned. Provide your customers with a rewards program and they’re more apt to stay subscribed longer and increase their total spend.
In an article which highlights important subscription retention strategies, it states that “half of respondents said they increased their spending or changed other purchasing behavior to achieve a higher tier status in a rewards program”.
A few easy ways to accomplish this is to offer free gifts at specific checkpoints or additional discounts on other items the longer your subscribers have been enrolled. The options for rewarding your best customers are endless and they’ll help get them reengaged with the brand and talking about it to others in their circle.
Make sure you provide a clear UX to access this reward. Referring back to our original example for Dan, we can update the account subscriptions page with a small timeline that shows the progress to the next reward. By presenting this on the same page where Dan might cancel, we can help discourage him from taking that action.
The e-Commerce subscription market is continuously growing as consumers look for convenient and cost-saving ways to get the products they want. It’s important for your business to keep churn low in order to increase each customer’s lifetime value. Small changes like enhancing UX can go a long way when it comes to retaining subscribers. Additionally, rewarding customers for their loyalty further encourages them to stay subscribed as they continue to see the value in their membership. Continue to identify what keeps the customers subscribed to your product as well as seek out what you can change to reduce your churn!