Subscription businesses are most successful when they fully understand user behavior from the moment they first hit the site, and well past the conversion point into their subscription experience. However, just as new individuals subscribe to your content, tenured subscribers are at-risk of cancelling their subscriptions.
As many as 54% of your subscribers in any calendar year will churn and cancel their accounts if nothing is done to retain the client relationship. What does that mean? It means that if you don’t continue to nurture and engage with subscribers after they get past the paywall, over half will cancel their subscriptions because they’re not getting the reminder of how great your product is and the affirmation needed to justify sticking around.
People want to feel special, especially if they’ve given their personal information over to a web provider. Without personalized communications and premium onsite experiences, they don’t feel special and they lose the incentive to retain their subscription accounts.
Cancellations can happen in the blink of an eye
If people feel they’re not receiving any value from their subscription, they’ll go ahead and cancel without thinking twice about it. That’s why proactive engagement is very important.
An early indication of a coming cancellation is disablement of auto-renew subscriptions. According to Piano benchmark data, over 20% of people disable auto-renew on the first day of their subscription, and up to 68% disable auto-renew in the first 60 days. Granted, not every one of those people who disable that feature will churn, but many will do so. It’s up to you as the publisher to identify why and try to minimize the churn rate as best as you can.
It’s crucial that your subscription technology offers ways to recognize and target users who have disable auto-renew as well as users who have credit cards or subscriptions about to expire. Passive churn is a massive problem, but one that can be mitigated quite a bit with the right approach and solutions in place. Our benchmark data also shows that while only 34.2% of churn is passive, they make up half of 50% of winbacks.
Trial offers are not all created equal
To help slow the rate of churn, you may consider offering a free or discount trial in the early stage of the subscription. But this approach is actually a complete drawback; you lose monthly revenue in the short term, and you also lose more subscribers in the long term.
According to the numbers, only 70% of people who receive free trial subscriptions will upgrade to the full price at the end of the trial. Over 80% of users who receive discounted trials will maintain their subscription at full price. But over 86% of people who pay full price at the beginning of their subscription will retain their accounts after the first month. Based on those numbers, trials can actually increase the potential for churn instead of incentivize users to stick around on your website.
Rather than promote discounts, you’re better off utilizing decoy pricing. This is a common subscription tactic where you include an artificially inflated premium price above and beyond the market value you charge for your subscription. The idea is to use the decoy price to drive more people into selecting the actual price for a subscription. If done effectively, decoy pricing can boost revenue over 106% for subscription businesses.
Present special experience-driven offers to subscribers
We end this series of posts where we began...with personalization. Don’t sit back and wait for at-risk users to churn on their own accord. Run re-engagement campaigns with personalized content to remind users the value that comes from their subscriptions. Remind them that they’ll receive high-quality content tailored to their unique needs by maintaining a relationship with your brand.
Examples of the types of content experiences you can provide are:
Invitations to VIP virtual events that are for subscribers only
Registration notifications for special webinars available only to exclusive subscribers
Special meet and greet sessions featuring industry-specific influencers
With the right offers, you can motivate even the most at-risk subscribers to reconsider their plans to cancel their subscriptions. Look at the data on their onsite activity, and tailor an exclusive offer that best aligns with their past experiences. You can expect the offer to at least slow down any plans to churn.
To get started with Piano and the easy-to-use experience that helps turn every action into a stroke of genius, contact your Account Manager or request a demo today.