Meet Churnzilla!

Subscriptions are booming, but I’m lurking around every corner

If you have a subscription business, I want to thank you for all the money you’re losing due to failed payments – it’s my favorite food. The people who hate me the most are the CFO and CMO because they know I take a bite out of their revenue and make their customers disappear. I heard that innovative humans have come up with a technology to put me on a revenue diet, but I’m counting on you never finding them. muahahaha!

Getting new subscribers is hard. Losing them is easy.

Too many subscription services try to overcome the drain of churn by investing ever more in paid acquisition of new customers while not even considering false declines and the aspect of involuntary churn. Keeping an existing customer costs less and delivers more value in the long term. Failed transactions kill your business revenue and account for 30% of all churn. These failed transactions can be due to false declines like banks cancelling due to fraud concerns, a non-updated credit card, and other reasons that were not the choice of the subscriber.

Magnet money
Eating churn

Let’s face it, churn is one ugly beast to tame

Following a signing up frenzy, retention is now a problem for many. Consumers subscribed to everything and now, if there’s any doubt, they’re out. After all the time, energy, and money spent on acquisition, the last thing subscription businesses want is for subscribers to turn into one-time customers.

Lack of engagement, an element of active churn, is the top cause for intentional cancellations. Providers must anticipate these triggers and convey the value to the subscriber. As your subscription scales to new heights, you need to get smart about intelligent retention strategies.

Passive Churn

Passive churn, also known as involuntary churn, occurs when a subscription is unintentionally canceled. Situations that can contribute to passive churn include customer care errors, failed payment transactions, and billing platform errors or omissions.

Active Churn

Active churn, or voluntary churn, happens when a subscriber voluntarily chooses to cancel a service. Some circumstances that can add to active churn include price increases, poor experience, lack of relevant content, and new competitors entering the market.

Retention Data

Unfortunately, customer churn is inevitable. To improve your product or service, find out why your subscribers are churning and how to prevent future churn. This will reduce cancellations in the future and will offer the customer a valuable experience that turns into a lifetime must have.

If you have a subscription business, watch this…