Here are some key guidelines for improving your subscription retention rate and increasing the lifetime value of your customers:
Provide superior customer support
New customers often churn because they’re not impressed by a company’s customer service. Miscommunications about items, unexpected charges, delayed shipping, long call hold times, unhelpful support staff, and delayed or nonexistent email support are all elements of poor customer support that can damage customer relationships and lead to poor customer retention.
In order to boost your customer subscription retention rate, make sure that you have built strong processes for managing customer expectations, including clear communications around purchases, shipping, and returns; and access to a best-in-class customer support team for customers who require extra attention.
Using support as an outlet to engage customers will also lead to positive effects. Is a customer asking about tracking a delayed package? Provide a discount by adding a few extra days to their monthly billing cycle. Notice a customer is dissatisfied with an order? Provide them with a free offer. Spending the time and resources to create these small moments will always be worth it when the alternative is losing them as a customer. Invest in customer support technologies and initiatives that will deliver excellent customer service, increasing your customer retention rate.
Create a personalized customer experience
Good customer support is one thing, but excellent customer service requires even more attention to detail. Providing more personalization in customer experiences can reduce the churn epidemic in subscription businesses. Research from McKinsey & Company on e-commerce subscriptions found that 28 percent of customers said that a personalized experience was the most important reason for continuing to subscribe.
Providing these customer experiences doesn’t need to be complicated. Delighting customers with personalized offers, handwritten notes, and other simple recognition of their loyalty to your brand are all great first steps to showing your customers you value and appreciate them. You can also make use of marketing automation technology that responds to their digital body language, sending them highly relevant content based on what they’ve shown past interest in. Creating these moments that matter for your customers—and celebrating that they chose your business—will keep them happy.
Build an engaging customer loyalty program
Encourage your customers to stay engaged and become brand advocates by providing generous incentives for remaining loyal to your brand and performing certain actions. The makeup subscription box service Ipsy, for example, gives loyal customers “points” for each month they receive a box, as well as the chance to receive extra points by taking actions such as leaving product reviews and referring Ipsy to friends. These points can be redeemed for free monthly bonus items.
A high-quality customer loyalty program can increase your customer lifetime value substantially. Rather than spending heavily on customer acquisition, focus on building loyal customers who’ll advocate for your brand.
Use customer feedback to help you improve your product and process
Pay attention to what your customers say about your brand — directly to you or on social media or external review channels. Are you meeting or exceeding customer expectations, or are you falling short? Pay close attention to trends in both customer complaints and praise to build a roadmap for improving your products and customer support throughout the customer lifecycle.
Learn how to identify warning signs of potential customer churn
Use your CRM to track subscribers down to the individual level to understand patterns that impact customer retention and loss. For example, how many subscribers skip two months of shipments and then cancel altogether? Can you develop customer retention strategies to re-engage with these customers by providing them with a special promotion or exclusive new product for their next shipment? Can you offer them personalized customer support to help them find what they want?
Pay close attention to those customers who seem on the verge of disappearing — it will be much easier to win them back while they’re still active in your customer base than after they’ve opted out.
Pay attention to benchmark metrics to help you understand your customer lifetime value
Once you’ve implemented new customer retention strategies, how can you track their success? Pay attention to changes in metrics over time, including the number of customers who maintain their subscription for 30, 60, or 90 days; their average spend; and how many new customers each existing customer refers. If you’ve worked hard to optimize the customer experience, you should begin to see a substantial boost to your bottom line.
Follow your progress over time and adapt your strategy to optimize for higher customer retention, such as testing out different types of follow-up email offers to lapsed subscribers to see which offer has the highest success rate, then building on those successes.