By Morten Suhr Hansen
The year 2023 is coming to a close. At the start of November, we have just about eight weeks of effective work left before the holiday season kicks in. So it’s easy to focus on getting next year’s budgets in order and closing out the year as smoothly as possible.
However, if you were to focus on just one more thing, I would suggest that you take a look at your work on churn. I’m sure it already occupies a lot of your attention, but here are 10 solid recommendations on what you can do to reduce your subscribers’ churn in just 30 days:
1. Automatic card information updates. You probably experience a significant portion of churn because you can’t charge a payment card. Often, this is because the subscriber has received a new card, but there are fortunately solutions for this. Both Visa and Mastercard have implemented an ‘account updater’ feature, allowing you to ‘subscribe’ to the new card details directly from the card issuer, so your subscribers don’t have to remember to update their cards themselves. So, start by checking if you already use the ‘account updater’ or if it’s a high-priority item on your roadmap.
2. What do you offer your customers when they cancel their subscription with you? Far too many subscribers are simply met with a ‘thank you for your time’ when they cancel their subscription. I experienced this myself with one of Denmark’s largest media companies earlier today! That’s missing out on a fantastic opportunity. Why not offer a pause instead of a cancellation, or an alternative offer, perhaps a shorter period or a smaller subscription?
3. Examine how you welcome new subscribers. When was the last time you conducted a ‘mystery shopping’ in your own business? Or had friends, family, or others in your network try to be customers in your store. Is it easy to sign up? Do we give a proper welcome to new subscribers? Are we effective at activating and engaging in the crucial first weeks of a new subscriber’s life? We often experience the highest churn after the very first period, many times because we’re not good enough at welcoming new subscribers to their new subscription.
4. Focus on survival in the first three to six months. The work on churn is challenging and lasts throughout the subscription’s lifetime. But following the point above, if you need to act quickly, concentrate on the first three to six months. It’s typically during this period that you experience the highest churn. But what is the actual survival rate after three and six months in your business? Get an overview of that and then consider what initiatives can increase this survival rate.
5. Which payment methods actually have the lowest churn? Is there a difference in how customers churn depending on the payment method? Yes, very often, that’s the case, so examine how it looks for your specific subscription base and consider whether you can move more of the customers to the payment methods that perform best (it’s often during sign-up that you need to prioritize the different payment methods).
6. Consider a more intelligent pricing strategy than just raising prices across the board. A new year and new budgets likely mean price increases. Do you have price increases planned for the new year? Probably yes, because even though inflation has once again fallen to a reasonable level, many subscription businesses have a pricing backlog. Consider whether you can make it more intelligent than just raising prices uniformly. Think about introducing (more) subscription tiers (tiered pricing) and consider whether the ‘grandfathering’ principle, where you raise prices for new but not existing customers, is a viable approach.
7. Consider/implement an annual subscription. This tip applies, of course, only if you currently offer shorter periods, perhaps the typical monthly subscription. We see more and more subscription businesses looking at the annual subscription. Either as the only option (e.g., Aarstiderne Plus) or as a supplement to the monthly subscription. Can it reduce churn? Yes, absolutely. I haven’t seen a case where the annual subscription didn’t have the lowest churn. Naturally, you should calculate what a potential discount for choosing an annual subscription would cost you. But my guess is that it could very well pay off.
8. Can you add value to your subscription? A powerful way to combat churn is to develop and enhance your product for your subscribers without significantly raising the price (which can also be used in conjunction with small price increases). Are there features, content, or services in your subscription that you can develop for your subscribers without costs escalating? If so, it’s worth considering implementing to create even more value for your subscribers.
9. Member-get-member/referral program. Do you have a strong program that allows your subscribers to offer a subscription to their friends and acquaintances? If not, it can be a powerful consideration. It’s, of course, a new sales channel initially, but several analyses show that it’s also beneficial for retention. Subscribers who refer others are more loyal, and often we also see that the referred members have a longer lifetime than new subscribers who have come in through traditional means.
10. Surprise & Delight “Thank you for your engagement as a subscriber – Thanks for 2023 – look forward to what we offer in 2024.” We conclude with a cozy touch appropriate for the season. Wrap up the year with a special message to your subscribers and thank them for being with you this year. Share with them what they’ve experienced (preferably personalized if possible) and let them know what to look forward to in 2024. A small tip that hopefully gets your subscribers excited about even more great experiences with you.
I understand that you may not be able to accomplish all 10 things in just 30 days. But you can certainly consider the above and supplement them with your own ideas to create a strong anti-churn plan for 2024. Because this has never been more important. November, December, and January are notoriously challenging months – this is when Danes scrutinize their budgets carefully! And the new subscription winners are those who have a solid grip on how to retain the subscribers they already have.
If you’d like to discuss churn and how to address it urgently, you’re always welcome to reach out to me or my colleagues. At Subscrybe, we can certainly assist you with the strategic aspects of all the above points – so don’t hesitate to get started!