For any subscription based app or SaaS business, retaining subscribers isn't just beneficial; it's essential. Though no app is immune to churn, there are ways we can soften it. In fact, many times — users want to stay subscribed, but may churn due to technical reasons (such as an expired credit card). Today, I'll share some tips I used to pilot a "churn prevention program" that recovered $215,000 worth of revenue in under 1 year.
Understanding subscriber churn
Before we talk strategy, it's crucial to understand two different types of churn you'll encounter:
Voluntary Churn: When subscribers choose to cancel their subscription willingly. Involuntary Churn: Occurs when subscribers are unable to continue their subscription due to technical issues, such as payment failures.
While you want to pay close attention to both kinds of churn, let's uncover how I tackled the second kind — involuntary churn. None of these techniques are complicated, but what they are is proactive. And, if you can get ahead of involuntary churn, I think you'll find most users wanted to stay subscribed anyways!
Here's what I saw success with:
Pre-payment failure notifications
One of the most effective ways to reduce involuntary churn is by simply alerting subscribers about upcoming payment issues. If you have infrastructure in place to detect these, you can get ahead of this problem in most cases. For example, emailing users telling them that their credit card is about to expire can prompt them to update their payment information before the payment eventually would fail.
This step is all about getting ahead of the problem before it's, well, a problem.
Payment recovery notifications
No matter what systems you have in place, eventually — a payment will fail. And when it does, immediately inform the user. A clear call-to-action, like "Update Credit Card Information", can significantly increase the chances of retaining the subscriber. While this is similar to the step above, here — we have hit a problem, but we don't want the story to end there. Instead, we've got to make it easy to let them fix it by:
Letting them know what the actual problem was (expired card, chargeback, etc.)
And, how to fix that problem.
Reward good standing
Offering incentives for speedy updates to payment information can motivate users to act. How? By offering up a discount! This has a two-fold benefit of softening the psychological blow of "Ah, I need to pay again." along with making it more palatable (i.e. "Okay, well at least it's more affordable now."). A discount on the next billing cycle or a special offer can make the process of updating payment details seem like a reward rather than a chore.
Enable grace periods
Implementing a grace period of about 16 days gives subscribers ample time to fix any lingering payment issues. This not only reduces churn rates, but it also conveys to users that their loyalty is valued by providing them time to address any payment hiccups without losing access to your services. Billing issues can be inherently stressful, and adding the stress of losing access to your pro features can often result in (most cases) unnecessary added frustration.
If you're new to grace periods on the App Store, Apple has a great overview covering how they work right here.
Wrapping up
Churn prevention is not just about keeping subscribers; it's about ensuring that they feel valued. And, that value can show up in a lot of different ways. Maybe it's giving them a break over a billing problem, or offering up a discount. Whatever it looks like, offering a hand during involuntary churn goes a long way. After all, once that first renewal comes up — there's no hiding. Either way they value your offerings, or they don't. And, if they do — help them stick around if issues arise.
Before we go, here's a quick list of what I've successfuly deployed to combat involunatary churn:
Alert users of potential upcoming payment issues.
When payments fail, tell them and tell them why.
Reward keeping payment details current with a potential discount.
Use grace periods for billing issues.
