Acquiring customers is the top-most priority for any business, which is why subscription programs have become increasingly popular. The top subscription app revenue grew by 41% in 2021. The competition in subscription apps for Shopify and other eCommerce platforms is tough. But where there are subscription plans, there is also subscription churn.
What Is Subscription Churn?
A subscription app helps generate recurring revenue and delivers immense Customer Lifetime Value (CLTV). The subscription business is competitive and has been growing consistently. The global subscription app revenue was $13.5 billion in 2021. However, due to the competitive nature of the business and the increase in subscription apps for Shopify and other eCommerce stores, subscription churn has also increased.
Subscription Churn is the total number of customers who stop paying for the subscription service in a given time. There are various reasons this might happen. Businesses calculate subscription churn differently. However, any business that uses subscription apps should be calculating it regularly to ensure customer retention.
Businesses usually calculate it using one of these methods:
- Customer Churn: A non-modifiable software to calculate it.
- Customer Churn Rate: Percentage of customers that stopped using the app/plan.
- MRR Churn: MRR Value that’s been lost.
- MRR Churn Rate: MRR Percentage lost because of subscription churn.
However, there are ways to reduce subscription churn.
Reducing Subscription Churn
As a business owner or manager, you need to make informed and effective decisions. If you’re losing subscribers at an alarming rate, you need to apply one of these methods to reduce it.
1. Identify Why It’s Happening
Just like you truly can’t solve a problem unless you know the reason for it, you can’t reduce churn if you don’t know why it’s occurring. You can use the best subscription apps for Shopify to reduce churn, but if you misdiagnose the problem, you’ll only be able to solve it in the short-term. Sometimes businesses will address other issues that customers didn’t even know about instead of the actual problems they faced. This distracts them from the actual pain points that need fixing. When customers face the issues consistently, they migrate to other apps, which will lead to an increase in subscription churn. Some of the most common reasons that customers cancel a subscription include dissatisfaction with the product, thinking the business doesn’t care about their success, or finding a better alternative.
2. Alert Customers Of Failed Payments
Churn can be both involuntary and involuntary. Involuntary churn is when the customer fails to make timely payments, loses, or has their credit/debit cards stolen, exceeds the credit limit, or has expired payment details. The best way to overcome this problem is to have an automated process that will alert the customers of the pending payment. Businesses also should go with subscription apps for Shopify and other eCommerce stores that have automated billing for subscription products with personalized email notifications, like AppstleSM Subscriptions and Loyalty.
3. Be More Careful Regarding Billing Cycles
Customer experience is key to a successful eCommerce business. Many customers complain that they are billed for a subscription plan when they don’t receive the products until a few days (or even weeks) later. The takeaway here is obvious – you need to be more mindful of the billing cycles. Focus on narrowing the gap between the billing and shipping dates. In addition, always send a courtesy email to your customers before they’re charged, reminding them of the pending payment. You should also send a courtesy email in case of a delay in the shipment. When customers believe they are appreciated, businesses earn major brownie points!
4. Provide The Option To Pause It
This is something businesses should offer but often don’t, and that’s the option to pause a subscription plan. Everyone’s situation is different, and they might hit a rough patch where they can’t afford the products anymore. According to the Subscription Commerce Conversion Index, almost 44% of consumers would pause their subscription instead of canceling it if given the option. This can help reduce subscription churn, and by not offering the choice to postpone, you might be leaving money on the table.
5. Facilitate Communication
Communication is important because 89% of customers will likely return to make another purchase after a good experience. Sometimes, customers that are new to using subscription apps might not understand how it works. Customers will respond well if they can easily communicate with the business for help.
6. Emphasize The Purpose, Not Just The Product
Over 68% of Americans will not buy a service or product from a company if it doesn’t align with its business goals. Customers aren’t just looking for a product. They’re looking for an experience, but being too in their face won’t help either. Take the brand Casper Mattress as an example. The company’s advertisements are prominent and in high-trafficked spots, but they haven’t tried to sell the products directly. Even on their website, they emphasize their purpose instead of their products. By positioning itself like this, the company can capitalize on adjacent markets as well.
7. Use A Robust Subscription Program/App
An eCommerce or Shopify recurring payments app is what merchants look for, but your subscriptions app should be robust. Adopting one that can handle complex matters is the best way to reduce subscription churn. It can single-handedly combat many hurdles that cause subscription churn. In addition, apps or more specifically tools like AppstleSM can be used across the board. They can be added onto an eCommerce site as well as your own website to create subscription packages.
The right solution should help with:
- Fine-tuning billing cycles.
- Offer personalized notifications and alert customers in case of failed payments.
- Allow the customers to postpone orders.
- Offer flexibility with multiple billing plans.
- Subscription order management.
- Track performance.
- Offers self-management subscriptions to customers.
- Makes targeted upselling easier.
You can find this and more with AppstleSM Subscriptions and Loyalty.
Welcome To AppstleSM – Your Top Choice For Shopify Subscriptions App
Looking to reduce subscription churn and take your eCommerce business to the next level? AppstleSM is here to help! The Shopify subscriptions app creates the best buying experience for your customers and reduces friction. Say goodbye to subscription churn and hello to recurring orders! Use AppstleSMon your Shopify store and even on your own website.
AppstleSM Subscriptions and Loyalty has been ranked number one in Shopify’s subscription category. Try it for yourself to see why we’re the best subscription app for Shopify. Contact us for more information.