Reduce Post-Black Friday Subscription Churn with Your Cancellation Surveys
It was a record-breaking BFCM, with merchants raking in over $13 BILLION in revenue and thousands of new subscribers promising more sales in the future.
This is exciting news for most merchants, even despite the light churn of deal-hunters that aren’t ready to stick with subscription long-term. In fact, let’s pause right there. There’s a golden opportunity right now to retain many of those new subscribers.
It’s all in how you optimize your cancellation surveys.
In this article, we’re exploring how to optimize your cancellation surveys to transform potential churn into continued loyalty, keeping those BFCM subscribers on board for the long haul.
Review your cancellation data
After a big acquisition or retention event like BFCM, you need to answer a few guiding questions to analyze your subscription data:
- Did our BFCM discounts attract sticky subscribers or just deal-hunters?
- Were there any cancellation survey trends?
- What were the most effective rebuttals for mitigating cancellation?
- When in the customer journey are customers churning?
- How many orders did they place, for how long, and for how much before they churned?
- What might have triggered any cancellation trend?
You need to know why your subscribers churned and what’s effectively retaining other customers. With the right data, you can tailor your retention strategies and messages to proactively reduce churn.
The only way to answer those guiding questions is with the correct data and the right metrics to provide that data.
There are four essential customer churn metrics you need to calculate:
Churn by Cohort
This metric measures:
1. How long do your subscribers stay subscribed?
2. Which products are they canceling most often?
3. Churn rate by shipment numbers
4. How many subscribers cancel after the first order but before the first recurring shipment?
Churn by Cohort helps you measure the dropoff points in your customer lifecycle. The most common dropoff point is in the early subscription lifecycle (between the initial order and the first shipment).
Churn Rate by Product/ SKU
This data can surface patterns in where your customers tend to churn. If you have multiple flavors of one product, and customers churn on one flavor more often than the others, you should feature the preferred flavors more prominently in your product catalog.
Churn by Cancellation Reason
Understanding why your customers leave is crucial to proactively preventing churn. Exploring the various reasons—whether it’s pricing, product dissatisfaction, or insufficient deals on favorite items—empowers you to make informed changes that enhance customer satisfaction and retention.
Customer Lifetime Value (LTV)
How valuable is each customer over the lifetime of their subscription? No matter the number, it must be high enough to make a significant return on investment. Otherwise, some tweaks to your subscription program might be in order.
Get powerful churn analytics to identify cancellation trends with tools like RetentionEngine.
Optimize cancellation surveys to understand why customers churn
While most brands can’t avoid the bargain shoppers that aren’t ready to be long-term subscribers, you can still capture valuable insights from their exit by optimizing your cancellation surveys.
You could add cancellation survey options like:
- “I just signed up for the discount”
- “I found better prices somewhere else”
Adding various options helps you understand how to retain other customers (if not win those customers back). Momofuku’s cancellation survey above allows them to segment their audience between deal shoppers and new customers with more long-term LTV potential.
Optimize cancellation survey options over time
Ask several customers for their reasons for canceling and use that information to create more standard options. Alternatively, start with a few core options and adjust them over time based on the data.
For instance, you might start with “price” as a major reason for canceling, but this could break down further into “I can’t afford this right now,” “I was looking for a discount,” or “It’s not worth the price.”
More specific reasonings could alter how you respond. If it were a temporary affordability issue, you could pause their subscription for a set period rather than cancel altogether. If it were a perception of value issue, you could offer a free product or a discount.
Understanding the issue can help you mitigate churn risk for existing and future customers.
Address your “other” category
If customers choose “other” on your surveys more than 5% of the time, add the option to comment on their reasoning. You might find patterns in their answers and adjust your selections.
You can also temporarily disable the “other” selection after adjusting your survey to see which options are driving the highest churn rates.
Avoid Recency and Primary Bias
Randomize the order of your cancellation survey options. It’ll protect you from primacy bias — the likelihood you’ll remember the first items on a list better than those in the middle. Recency bias — the greater likelihood you’ll remember more recent information better — is also a concern.
Create cancellation rebuttal offers that help you retain customers
Making them an offer that’s too good to refuse… is essentially the key to retaining your customers when they’re on the brink of cancellation. The only way to do that is to tailor your offer to counter their reason for leaving.
Again, Momofuku is a good example of this. When their customers reach a cancellation survey and click “I only subscribed to receive the discount,” they’re offered a further discount to maintain their subscription.
OLIPOP is another excellent example. When you try to cancel your OLIPOP subscription, they pepper their generous 30% discount with flavor swapping and fun graphics. So far, this has saved them 25% in customer churn.
When subscribers answer your cancellation surveys, they’re offering personal data that you can use to optimize your responses to their cancellations. A machine learning tool like Stay’s RetentionEngine is the only way to analyze all those insights, find patterns within their answers, and instantly customize offers to attempt to retain your customers in the moment of churn.
Get ahead of the churn with segmentation and personalization
Many brands expect a level of churn around the holidays, especially since most companies focus more on bringing in new customers versus retaining their existing ones. You can avoid the loss of both the new customers you bring in and your existing customer base with the right segmentation and promotions.
Take the cue from Vita Coco, who decided to give their existing subscribers an even greater discount than incoming customers.
First, they segmented their existing subscribers from their holiday promotion emails to offer them a discount on their next order. They offered first-time shoppers a separate promotion, but one less advantageous than becoming a long-term subscriber and maintaining that subscription.
This meant that their new customers received a discount and their existing customers were incentived to stay. 11% more of their new subscribers retained their subscriptions. They never even had a chance to reach their cancellation survey.
Read more about the Vita Coco Black Friday Sales Event here.
Black Friday and Cyber Monday may bring a lot of deal hunters to your checkout portal. But there are dozens of ways to delight them into staying with you, even if they reach that cancellation survey.
You just need the ability to collect and analyze their feedback to provide personalized deals. The best way to do that is with Stay.
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