Subscription retention can be defined as the number of subscribers keeping their subscription active. This is how you find you if your subscribers find sufficient value in the service or products you are offering. The key to a successful subscription business relies on the retention strategy you have in place. So how do you retain subscribers?
Here are five methods to put in place to ensure your subscribers stay with you for the long haul. When your retention rates are good, your average subscriber lifetime is sure to follow.
Step 1: Surveys
Utilize a survey or questionnaire when your subscriber signs up for your service or box. One question to include would be how did you hear about us? By asking this question, you can focus your attention on gaining new subscribers. After their first box or service, send a feedback survey asking the subscriber what they liked or didn’t like about the service or products. You will see if you have met these subscribers’ expectations and continue serving their interests in the coming months.
Step 2: Reward Your Subscriber
Being a loyal subscriber should be rewarded! Offer a free small gift after a year and each year after that. Some companies even throw in a small birthday gift or discount. This shows you value your subscriber and makes them feel important to your business. If they share or refer subscribers to you, offer a discount after a certain amount of their friends or family sign up!
Step 3: Communication
It is crucial to communicate with your subscriber. This should be done in multiple ways, or better yet, let your subscriber pick how they want to communicate with you. Phone calls with customized messages and an option to connect to a live person. Text messages have the highest open rates. Over 50% of subscribers say they would like to be notified by text message. Lastly, e-mails are always a great way to communicate shipping updates, billing, and product information. The content you share is also important, such as new features and product value.
Step 4: Billing
It might not seem like billing fits in, but it is essential for retaining members, if not the most critical step. 50% of your churn is due to failed payments. On average, 15% of your monthly payments end in failure, and from that, half of those subscribers will drop off due to a simple payment issue. Let your subscribers know when their next payment is due, allow your subscribers to pause or hold off on their payment in order to keep the subscriber active in the future. Don’t forget that services like account updater can proactively update lost, stolen, and expired cards before your billing cycle. This is huge for your business and your subscribers because they don’t have to call every business they have set up on auto-pay. Unfortunately, only 57% of businesses use a service to update credit cards.
Step 5: Use Your Data
If you can keep track of data, use it to your advantage. You can understand your subscribers to provide you with a wealth of data and information. On the flip side, you will identify gaps in your business. For example, one way to measure churn is by calculating the average lifetime value of your subscriber. This is the expected amount a subscriber will spend. You can also sort your subscribers by who is likely to cancel and potentially save this subscriber.
These are a few strategies to increase your subscription retention, but there are many things you can do to achieve this. The goal is to maximize your chances of retaining every subscriber. Remember, it can cost 4-10 times more to gain a new subscriber than to keep an existing subscriber.