There are too many voluntary churners
Posted: Mon Feb 17, 2025 8:13 am
Twenty to forty percent of lost customers typically are the result of payment failure. One common scenario is a customer getting a new credit card and forgetting to update their subscription information. Keep in mind, the average US household has 9 subscriptions on the go. Another type of payment failure is where a credit card becomes maxed out without the customer realizing — also a common side effect of having too many subscriptions.
to afford losing a customer that didn’t mean to cancel. Keep on top of payment and credit card failures for a higher retention rate.
Term Optimization
Brands like Netflix and Amazon Prime have popularized the monthly subscription model, but it’s important for brands to ask if that makes sense for their product. It might be better if customers subscribe quarterly, even annually. These numbers from Campbell suggest longer-term subscriptions are good for reducing churn:
Annual customers will retain at a 30% higher rate than a monthly.
Quarterly customers will retain at 20-23% higher than monthly.
Simply giving the option of a quarterly on annual subscription, or even offering a discount or special gift for long-term retention can take a bite out of churn rate and increase recurring revenue.
Salvage Offers
Salvage offers are offers made to customers who don’t want to leave but are considering cancelling for some reason. These offers should be tailored directly to the reason for cancellation, which means you’ll need a overseas chinese in australia data solid outboarding quiz that customers fill out before they cancel.
Some salvage offers tailored to common cancellation reasons:
Too expensive: Have a free month, or 10% off the next three months.
Too much product: Switch to a quarterly subscription instead of monthly.
Just taking a break: Get a 25% off return bonus on your first month back.
If the customer doesn’t like the product, price point, or simply are switching to a competitor, there’s not much you can do except thank them for their business. Salvage offers should be directed at customers who don’t want to cancel but may need to for reasons they feel are beyond their control. Brands that make salvage offers can lower their churn rate by 10-30%.
According to Campbell, brands that focus on the technical or mechanical aspects of their churn rate, and optimize for involuntary churn can increase their LTV by anywhere from 20-50%.
to afford losing a customer that didn’t mean to cancel. Keep on top of payment and credit card failures for a higher retention rate.
Term Optimization
Brands like Netflix and Amazon Prime have popularized the monthly subscription model, but it’s important for brands to ask if that makes sense for their product. It might be better if customers subscribe quarterly, even annually. These numbers from Campbell suggest longer-term subscriptions are good for reducing churn:
Annual customers will retain at a 30% higher rate than a monthly.
Quarterly customers will retain at 20-23% higher than monthly.
Simply giving the option of a quarterly on annual subscription, or even offering a discount or special gift for long-term retention can take a bite out of churn rate and increase recurring revenue.
Salvage Offers
Salvage offers are offers made to customers who don’t want to leave but are considering cancelling for some reason. These offers should be tailored directly to the reason for cancellation, which means you’ll need a overseas chinese in australia data solid outboarding quiz that customers fill out before they cancel.
Some salvage offers tailored to common cancellation reasons:
Too expensive: Have a free month, or 10% off the next three months.
Too much product: Switch to a quarterly subscription instead of monthly.
Just taking a break: Get a 25% off return bonus on your first month back.
If the customer doesn’t like the product, price point, or simply are switching to a competitor, there’s not much you can do except thank them for their business. Salvage offers should be directed at customers who don’t want to cancel but may need to for reasons they feel are beyond their control. Brands that make salvage offers can lower their churn rate by 10-30%.
According to Campbell, brands that focus on the technical or mechanical aspects of their churn rate, and optimize for involuntary churn can increase their LTV by anywhere from 20-50%.