5 Tips to Lower Your Churn Rate

Ever heard of a “churn rate?” Your churn rate is the percentage of customers that you lose every single month. It’s often said that a high churn rate is like a leaking bucket – just as you can’t fill a bucket that has holes in it, you’ll never grow your subscription box brand if you’re churning out (losing) more customers than you’re bringing on every single month.

So the question is, how do you get on top of your churn rate? Keep reading for 5 tips to lower your churn rate. 

1. Make consistent product iterations.

The #1 reason that people will cancel your subscription is because of an issue with the product or with the customer experience. In order to combat this, you want to make sure that you are constantly collecting feedback from your customers. 

Send out a monthly or at least a quarterly survey to collect customer feedback from both active and canceled subscribers. Find out what they like and dislike about the experience. Then use their feedback to make consistent product and customer experience iterations so that you can address those issues and overcome those objections over time.

2. Optimize your on-boarding experience.

If you look at your churn data right now, you’ll probably find that the point in the customer journey where you have the highest percentage of churn is the first month. This is because a lot of people are just purchasing to test and see if they like your subscription or not. 

In order to retain these customers that subscribe for a test or trial period, you need to make sure that your on-boarding experience is on point. The on-boarding experience is basically your customers’ first impression. Its role is to welcome people into the subscription experience, invite them to engage with your community, and set expectations properly.

In order to do this correctly, you want to make sure that in the first email your customers receive after purchase, they feel appreciated for purchasing their subscription. It should set shipping and customer service expectations so they’ll know when they can expect their box to ship and how to contact customer service.

You might even want to invite them to join a Facebook group where they can engage with the rest of your community. Overall, this email should wow your customers with additional value that they weren’t expecting.

If you’re able to do this successfully, you are setting the precedent that you are a company that over delivers on what you initially promised. That will entice them to stay subscribed for a longer period of time. 

3. Build an engaged community. 

A lot of people make the mistake of just sending out their product every single month and doing nothing to cultivate a community within their sub box brand. What they fail to realize is that building an engaged community is an absolutely amazing retention tactic.

If you can do this effectively, what will end up happening is that a lot of your subscribers will build relationships and connections with other subscribers in your community. This will make your subscription box more “sticky,” meaning more people won’t want to leave.

If you’re able to create a thriving and vibrant online community for your active subscribers, people will build relationships within that community. Then they’ll feel guilty about leaving because they won’t want to lose the connections and relationships that they’ve built through your sub box community.

4. Use “save offers.” 

No matter how good at retention you are, there’s always going to be a percentage of customers that still try to cancel. The key here is to identify the top five reasons why people are canceling and then to create a “save offer” around each of the reasons.

For example, if someone says the reason they’re canceling is because your box is too expensive, you might offer them a “save offer” of $20 off their next month’s box. If they’re canceling because they don’t have time to use your product, you might offer them a pause or to skip a month instead of canceling. If they say that they just don’t like your product, that’s an opportunity to cross sell them on a different product that you might offer. 

In summary, try to identify the top five reasons that people might cancel your subscription service and then create a save offer for each of the specific reasons. 

5. Use “win back” campaigns. 

A win back campaign is where you send emails or text blasts to people that have already canceled their subscription and you use some kind of offer or promotion to encourage them to resubscribe, or win them back. 

You should be as aggressive as you possibly can with win back campaigns, because at this point in the customer journey, it costs you nothing to reacquire these customers because you already have their email addresses. 

In conclusion, all 5 of these tips can help you to lower your sub box churn rate. Churn is something that you have to stay on top of and you should put as much effort into retention as you do into acquisition. This is where many sub box companies unfortunately go wrong and miss out on retaining or winning back so many customers. So use these tips to ensure that you’re filling up your bucket more than you’re allowing it to leak every month.

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