Setting up a business with the prospect of gaining enough revenue is what we all take into consideration. But meanwhile achieving revenue targets, the churn rate appears to be the biggest hurdle. Let us first explore what churn rate is? And how does it affect the subscription business?
Churn rate refers to the amount or percentage of the customers that leave your business and no longer take your services. Churn rate acts as a decisive factor when it comes to increasing sales for a subscription business. It acts inversely proportional to the sales. The more churn rate the less the sales and vice versa.
How Churn Rate Affects the Subscription Business?
As mentioned earlier churn rate directly hits the sales no matter which business you are into. But here we’ll just stick around the subscription industry. Without any uncertainty, subscription business runs on the customers or subscribers. If there is a loss at the subscriber’s end your whole subscription business will be at stake. It runs on a simple phenomenon, the more customers the less the churn rate and as a result, the whole business will thrive. So to remain in the subscription market, businesses have to start considering the churn rate as a priority. Else the sales will get directly hit.
How to minimize your churn rate?
There are factors that play an important role in reducing the churn rate. The list is cited below.
Take account of your subscribers/customers
Poor customer support and service are the biggest cause of why customers leave. In fact, according to research, eighty-nine percent of customers move on to a contending product right after having a bad experience with one company. Maybe your customers are not feeling the apt connection with your company, or they do not feel that they are appreciated and welcomed enough. Reaching out to engage with your users can help you earn their loyalty and minimize the churn rate.
Take notes of your Loop Holes
Every business has its share amount of loopholes and weaknesses deterring its business growth. Maybe there is a need for you to improve your dashboard or user interface or enhance your customer service department thoroughly. When you reach out to your customers, you will be able to identify many of the factors driving them away. One of the most effective ways to minimize the churn rate is by approaching your customers directly and finding out why they are leaving. Talk to them to find out what you are doing wrong and how you could correct it. You can reach out to customers in various ways, including customer satisfaction surveys, feedback bars, and social media comments, etc.
Split your Customers
There is a big difference between someone who is loyally been using your service or product for months and one who didn’t convert after a free 30-day trial period. Splitting your customers into diverse groups can help you aim them correctly for different circumstances. It runs on the simple principle of conversion and recovery.
The best idea is always to segment your users into several groups. For instance, one of them might consist of the end-users who spent more time than average in completing tasks. You might get results that these users were encountering some issues, so you can better buckle up and approach them on a priority basis.
Reach out to the Best fit Customers
By reaching out to your customers before they need you, you are demonstrating proactive efforts and also displaying that you have invested in helping them get the most out of your product or service. But not any old outreach will do. You can reach out to them through an active email campaign. The body of the message or resource you choose to send them should be directly linked to the product or service usage. For instance, if someone signs up for your product or service and you notice that they are not leveraging all of what’s available to them, you might send them a friendly nudge.
Another way of minimizing the churn rate is proposing customers with additional incentives. Give customers a reason to stick around by offering them something special – maybe a promo, discount, loyalty program, etc. This trivial exertion can go a long way when it comes to showing your existing customers how much you value them in your business.
While defining when to extend these incentives, few other aspects that need to contemplate. For instance, if the subscribers are approaching towards the end of their subscription contract and you are apprehensive that they might not renew it, you can provide them with a discounted renewal rate which can act as a push they needed to stick around to your service or product. Another thing to consider is the customer’s needs. If you predict that a customer is going to cancel the subscription after realizing that your product or service is not what they were looking for, incentivize them to stay on board while on the other hand, you can continue working on developing out better feature or strategy that will help them stay for longer.
Head towards SubscriptionFlow to have a lifetime subscription management experience with minimal churn rate. At SubscriptionFlow, we provide the best subscription services that will help you to achieve better revenue rather than worrying about the churn rate.