4 Post-Churn Marketing Strategies For Your Subscription Brand
For subscription businesses, retention is the name of the game, and data plays a key role in this effort. Subscription brands consistently leverage customer insights to improve and personalize the experience for existing users in order to prevent cancellations. Yet even the most successful companies have to grapple with some level of churn—in fact, subscription brands see an average 6% churn rate.
But churn, while inevitable, does not render a company powerless. With the right marketing approach, brands can win customers back.
Just as they lean on it to iterate on member experience, subscription brands can also leverage data as part of a re-engagement strategy. Not only are there pre-cancellation customer preferences to consider, but cancellation data—the reason(s) why a member is pausing or terminating a subscription—can also offer valuable insight to help target marketing opportunities.
Here, we’ll explore four data-driven strategies a subscription company can use to convince the churned to return.
1. Stay in Touch
Communication with customers does not necessarily have to stop when shipments do. If a now-former client remains subscribed to a mailing list, or is still following the company’s social media accounts, that client remains a member of your audience. Keep that client in mind when composing marketing emails or posting on social media.
Remember that communication is not one-size-fits-all. No one message will resonate with every churned customer, largely because each subscriber left for a specific reason. Personalization is key in today’s retail landscape, so using customer preference data (from before a cancellation) to customize communication is essential.
MonsterInsights co-founder Chris Christoff suggests segmenting former customers and employing targeted communication. “Let’s say you own an online pet supply store and want to reach your inactive email subscribers,” he writes. “First, pull all inactive subscribers who haven’t opened an email in at least six months. The key is to keep them in their designated segments. In other words, all of the inactive customers interested in dogs would go to one group, and those interested in cats would go to another.”
2. Focus Your Efforts
Some who unsubscribe are gone for good; you won’t be able to win back everyone. Instead, review cancellation data and historic customer data closely to determine which customers are most amenable to re-subscribing.
“Many companies try to regain every lost customer, but this can sap marketing dollars; firms will be more efficient if they focus on people whose prior behavior suggests a predisposition to return,” states research from the Harvard Business Review. “Customers who have referred others, who have never complained, or who have had complaints that were satisfactorily resolved are the best bets.” Data can reveal precisely who these customers are.
The same research indicates that the reason a customer canceled can be telling. A customer who canceled for dissatisfaction is less likely to re-subscribe than one who canceled solely because of cost. Someone who cancelled for both of those reasons is the biggest gamble.
3. Offer Promotions or Incentives to Rejoin
Depending on who’s most likely to return, HBR also notes that different incentives will appeal to different individuals. For some, motivation to re-subscribe might come in the form of a service upgrade; others might be seeking a reduction in monthly cost. Sometimes, it might take a combination of incentives to convince a customer to return.
If cancellation data reveals that a subscriber was satisfied with the service and canceled for cost-related reasons, a discount code might make re-subscription more feasible. Meal kit subscriptions like HelloFresh are known for offering free boxes, for example, or reducing the price of boxes for a certain number of months.
But companies must be mindful about the costs associated with these efforts and use data to shape re-engagement strategies. “Although a service upgrade has the lowest success rate, it’s the cheapest strategy and has the highest return on investment,” HBR found. “And while the bundled offer has the highest success rate, it also has the highest cost and the lowest ROI.”
4. Identify, Correct, and Inform
Use feedback to your advantage. If customers say they have unsubscribed because the service was not what they expected it to be, pay attention to related critiques. By participating in surveys or exit questionnaires, customers might be telling you exactly how to get them back.
When possible and practical, implement the tweaks customers suggest, or make an effort to solve the problems they have presented. Then, tell them about how you’re solving the issues raised.
Domino’s Pizza famously collected feedback from customers and found their audience had a problem with the taste of their pizza. So the brand took action. The company reacted to the comments, fixed the problem, and shared its solution with customers. The result was ‘The Pizza Turnaround’ campaign, which documented the process of how the company implemented customer feedback to improve its product.
Subscription companies have a unique ability to acquire a customer and retain them indefinitely, with reliable revenue rolling in every month. Yet this revenue is not guaranteed—customers can bail at any moment if they’re not satisfied with the experience, and convincing them to come back will require a renewed effort. But, with the right data and marketing methods, it’s not impossible.