A Guide To Cancellation Flows To Reduce Subscription And Membership Churn

Your subscription and membership plans can succeed only if you are able to retain subscribers year after year.

A high churn rate would mean loss of revenue and an increase in new customer acquisition costs. Both these aren’t good for any subscription business.

However, not all subscribers who intend to cancel actually go through the cancellation. Thanks to effective cancellation flows.

In this blog, we look at effective cancellation flow strategies to incorporate into your Shopify and Shopify Plus subscriptions and memberships.

Let’s get started!

What are cancellation flows?

Customers showing an intent to stop their relationship with your brand by cancelling subscriptions or memberships is not a positive feeling. It can hurt your revenue and customer loyalty rate.

So when customers initiate a cancellation request, eCommerce brands typically run a series of steps to try and stop them. Brands try to convince customers to change their mind.

The steps brands take when customers’ show intent to initiate cancellations is called cancellation flow.

This flow involves brands offering assistance to customers, collecting feedback, offering incentives for continuation, or alternative solutions to improve the chances of customers not cancelling their subscriptions.

A cancellation flow starts from the time customers display an intent to cancel their subscription. And it can last even after they go through with cancellations.

Why are cancellation flows important?

Whether yours is a SaaS, online streaming, eCommerce or mobile app subscription and membership business, cancellation flows can be the factor that can make or break your business. Here are the reasons why cancellation flows are critical for your business.

1. Reduce churn

Acquiring new customers costs five times more than retaining old ones. And hence, it’s critical to reduce churn. Having well-designed cancellation flows on your Shopify store can help reduce churn, retain more customers, and reduce your dependency on new customers. By reducing churn, you can ensure long-term relationships with subscribers and members.

2. Better customer understanding

When you associate with customers over a long period of time, you can get to know them better. Having a cancellation flow that helps reduce cancellations can lead to long-term relationships with customers, helping you understand them better.

3. Revenue retention

Shopify subscriptions and memberships are also sources of recurring revenues for customers. For example, paid plans generate regular revenue. Moreover, the recurring nature of subscriptions and perks offered via memberships drive more sales. Hence, effective cancellation flows help retain revenue flow into the business.

Read: Customer Acquisition VS. Retention – What To Focus On?

Cancellation flows to have in place for subscriptions and memberships

The cancellation flow you design for your subscription or membership business will depend on your products and services, industry, and other generic aspects. Here are 9 cancellation flow strategies you must consider for your Shopify business.

1. Show them subscription or membership benefits

Over time, as your customers join other subscriptions, they may start seeing less value in your subscription. Hence, when customers show cancellation intent, direct them to a page where you have listed all the benefits of signing up. This page should remind them of why they joined and how the subscription or membership is benefiting them.

Here are a few things you could do:

• Use data from the customers’ history to highlight the benefits
• Use customer testimonials and reviews to highlight benefits
• Highlight any new benefits that are going to be added in the future
• Show all the exclusive benefits they enjoy as part of the plan

2. Collect feedback, reasons for cancellation

Your subscribers might be cancelling because they might have faced some issues. But that shouldn’t be the reason they disassociate from your brand. You can turn those reasons into learning and opportunities for improvement. Identify the reasons. Try to fix the issues to retain subscribers.

Do this:

• Have a feedback form as part of your cancellation flow
• Ask them specific questions about their subscription and membership experience
• Conduct an exit survey via a form, a call, via chat, or other communication channels
• Address customers’ issues and problems with the best possible solutions. Make them feel heard

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3. Offer alternatives to cancellation

If you want to stop your customers from cancelling subscriptions and memberships, think strategically. Most times customers aren’t sure about their decisions. They may wonder if they should cancel or not? Or continue for some more time and then decide?

This is when you must catch their attention by offering alternatives to cancellation. Here are some cues:

• Coax them to pause their subscription or membership for a short period and then restart it
• Offer them options to upgrade or downgrade their subscription or membership plan
• Offer a discount to retain them. For example, one month free subscription upon renewal
• Incorporate an intuitive membership app in your Shopify store to automate real-time personalized incentives to customers

4. Personalize your offers and incentives

Today, customers expect personalized experiences from their favorite brands. And most brands try to incorporate personalization strategies into their marketing plans.

So imagine, if you fall short in creating personalized offers, your customers might not get the same feelings they get from other brands. The result – they may not want to continue with your subscriptions and memberships.

Here’s what you can do to personalize cancellation flows:

• Offer personalized discounts by speaking to individual subscribers and asking them how you could make them stay
• Personalize offers based on subscribers’ preference and history
• Make your offers relevant and exclusive, making them want to stay
• Use personalized details, such as address them by their name, mention how long they’ve been subscribers, and other special details

5. Add a human touch to the cancellation flow

78% of customers prefer human customer support. Customers know when they’re chatting with a bot and when there’s a real person on the other side. And when it comes to something as sensitive as cancellations, it’s critical that you bring in a human touch to convince them to stay.

Here are a few ways to take a human-to-human approach in cancellation flows:

• Instead of a chatbot, have a real person conversing with subscribers
• Offer them personalized offers, talk to them, meet them if possible, engage in video conversation, if you need to
• Send a message from the CEO or founder to convince them to stay
• Understand the subscriber’s sentiment and respond accordingly. Only a human can really understand customers’ emotions

6. Share a feedback survey form

At times, when subscribers and members have already made up their mind to go ahead with cancellations, there is not much you can do. However, it’s critical to make their cancellation experience smooth and easy.

Providing a good experience during this time can increase the potential of these customers returning to sign up again in future. Here are some tips to follow to win back customers in the future:

• Add a pop-up feedback form when a subscriber clicks on the cancel button
• Ask customers the reasons for cancellation
• Keep the feedback form short and to the point
• Provide space for customers to share their own thoughts
• Ask targeted questions that can help you gather information about them
• Offer real-time incentives and offers to stop cancellations

7. Segment customers based on survey responses

Subscribers can have many reasons for cancelling, for example, maybe the payment gateway isn’t secure, or deliveries were delayed. To create the next steps for these different issues, incorporate segmentation. Create relevant cancellation flow steps for each segment.

Let’s understand how to go about segmentation for cancellation flow:

• Segregate the different issues into different segments, for example, high subscription fee, poor customer service, etc.
• Create personalized messages and offers to address these unique issues so that customers feel heard
• Offer alternative solutions, offers, and incentives based on the unique concerns

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8. Collect data on common reasons for cancellation

Some of the most common reasons for subscribers and members cancelling their plans are: high subscription fee, poor customer experience, low value from benefits, and boredom.

An effective cancellation flow strategy is to identify common reasons. By doing this, you can address the most common reason subscribers are cancelling your subscriptions.

For instance, maybe subscribers are not happy with the way your subscription platform or app functions. A solution for this could be to explore a more efficient subscription app for your Shopify store. Providing a smooth digital experience can help you reduce churn.

Read: How To Reduce Shopify Subscription And Membership Churn During The Holidays

9. Re-engage ex-subscribers in the future

Let’s face the truth – you may not be able to retain some subscribers even with the best strategies in your cancellation flow. But that doesn’t mean you have lost them forever. You can attempt to encourage them to join your subscriptions or memberships again.

Here’s how you do this:

• Use data from individual subscribers past activities
• Create personalized and targeted campaigns to entice them to rejoin your subscriptions and memberships
• For example, send them discounts and exclusive perks during the Christmas or New Year season telling them how much you miss them and all the new things they are missing out on

Design the best cancellation flows for your Shopify subscription and membership plans with Appstle

If you haven’t yet incorporated cancellation flows in your Shopify subscriptions and memberships, you’re way behind your competitors and the industry.

Get your cancellation flows started with Appstle subscription and membership apps. Appstle’s churn management and automation features ensure you can communicate with subscribers in real-time, personalize incentives, and initiate cancellation flows automatically.

Explore Appstle Subscriptions and Appstle Memberships apps to add intuitive and well-designed cancellation flows. Improve retention, customer experience, and profitability.

Install Appstle Subscriptions or/and Appstle Memberships app in your Shopify site today!