The worldwide subscription e-commerce market is expected to be worth more than $900 billion by 2026. That means subscription businesses face more competition than ever, and subscribers could cancel without warning if they find a better offer elsewhere.
But not all churn is intentional: some subscribers may cancel unintentionally. Whatever the reason for cancellation, it’s crucial to reduce churn and keep your subscribers returning for years.
How? Fortunately, there are plenty of techniques to improve subscription renewals and reduce churn. We’ll look at seven great ideas to help you get started below.
7 ways to improve subscription renewals and reduce churn
Offer automatic renewals
If you offer fixed-term subscriptions and a subscriber forgets to renew, they may be frustrated that there was no automatic process in place. That frustration might prompt them to not renew it at all and try another option instead.
Offering automatic renewals is a simple way to avoid that and reduce churn. Allow subscribers to set up automatic renewals when they sign up and create offers or discounts to incentivise existing members to switch from manual renewals. Even in B2B, these have become more common.
Know your customers
Knowing your customers is fundamental to delivering a positive subscriber experience from start to finish. You should understand your target demographics in depth so that you can provide the right products, services, and prices.
And a key part of knowing your customers is identifying which segments are more likely to cancel their subscriptions. When you know who is at higher risk of cancelling, you can take action to keep them engaged.
Analyse engagement metrics for those customers that have been inactive for two months or more. They may have forgotten about their subscription or be too busy with work or personal responsibilities to use it.
Whatever their reasons, inactive subscribers could be at risk of cancelling. However, they may stay subscribed if you create an enticing offer.
Pay attention to customers that have contacted your customer support multiple times, too. They may be experiencing issues with your service. If they are left waiting long enough, they might form a negative impression of your business and cancel their subscription.
Make sure you’re offering the best service possible
Would you keep subscribing to a service that fell short of the quality you expect? Probably not. And it is unlikely that your customers will either.
Subscribers are more likely to stay loyal if they get what they want from your service. But you may not know what that is unless you ask.
Contact your subscribers regularly and ask them to provide feedback on various aspects of your service. Here are a few good questions to ask:
- Are they satisfied with the range of payment options available?
- Have they noticed any gaps in the services you offer?
- Do they feel they’re getting good value for money?
- Is your website easy to use and navigate?
Invite subscribers to make suggestions and raise any frustrations they may have honestly. The better you know where you are going wrong, the more likely you are to make positive changes that reduce churn.
Create personalised renewal experiences
Sometimes the best way to keep customers on board is during the cancellation process. Offering personalised renewal and cancellation experiences can go a long way towards reducing your churn rate.
Depending on a customer’s reasons for cancelling (e.g. increased costs or poor performance), you might be able to retain their subscription if you:
- Provide them with dedicated support to address issues
- Offer encouraging incentives, like discounts or bonuses
- Suggest other subscription tiers that suit their needs better
The key to creating personalised renewal and cancellation experiences is regularly gathering subscriber data and feedback across all segments.
Offer flexible pricing to suit different demographics
Subscribers in specific segments may not need the same type of service as those in another, so why should they pay the same for features or solutions they might never use?
Provide new customers with several subscription tiers to suit different budgets and needs. Lower tiers should be streamlined but still include everything subscribers within those groups require.
Forcing customers to pay more than they feel they should to access essential features or services won’t win you any fans. And ensure that higher tiers offer enough value to justify the added cost.
Offer a grace period
Customers who miss your reminders to renew their subscriptions may be totally put off your business if you cut them off from your services immediately. Especially if they lose access to their stored data and preferences.
Allow them at least a few extra days after their subscription runs out to take the necessary action. If they decide to renew, great. But if they choose to let their subscription expire, they will still have time to prepare for the change and leave on good terms.
Test your renewal process for ease of use
Your renewal process needs to be simple to use and clear from start to finish. Making it hard for customers to renew their subscriptions will leave a bad taste in their mouths. It might even prompt them to consider other options. Needless to say, you should have an online renewal process.
But how will you know how user-friendly your renewal process is if you don’t try it yourself?
Review your renewal process carefully to see how easy it is and if there are any major issues. Go through all the same steps as your customers, and identify any confusing, tedious, or frustrating parts. Then make the necessary changes.
Build excellent renewal experiences with Limio
Set up a Renewal Page, build unique Renewal Campaigns, create Journeys that direct customers to the right Renewal Campaigns, and test it all to ensure outstanding experiences. It’s quick, easy, and efficient.