Tested Tactics to Reduce Voluntary Churn and Retain Customer Loyalty

What is Voluntary Churn?

Voluntary churn happens when a customer decides to stop using your product or downgrades from a paid version.

  • Happy churn takes place when the customer has finished using your product for their campaign or task and cancels their subscription, despite their positive experience. A good way to identify the happy churners is by looking at the percentage of canceled accounts that have been reactivated at a later date.
  • Fake churn — or churn that isn’t really churn. It applies to subscribers who take advantage of a 30 or 60-day money-back guarantee policy. Separating out the users who fit into this category is usually easy because there is a different dynamic going on that isn’t representative of a typical long-term user who decides to cancel.

Can You Predict Voluntary Churn?

Voluntary churn can indeed be predicted by many factors, such as geography and industry, who your customers are, whether your offerings are premium or low-end and if they are monthly or annual, and so on, but establishing benchmarks is the key that will help you focus on what is the most critical.

How to Prevent Voluntary Churn

Preventing voluntary churn requires the right combination of product engagement, customer experience, and perceived value. If customers don’t use your product often enough, don’t have a good experience when they do, or don’t see value in your product, they won’t stick with you. This is true whether you’re talking about free trial users considering a paid upgrade or paying customers deciding whether to renew.

Encourage Your Customers to Auto Renew

Auto-renewal is a billing model where your customer’s payment details are charged automatically at each billing interval, without requiring them to take any action — as opposed to manual renewals, where the customer renews the subscriptions themselves.

Send Renewal Reminders Correctly

The timing and frequency of your renewal reminders are important. Best practices dictate that you segment messaging based on renewal status.

Provide the Option of Pausing Subscriptions

Around 10% of customers that are canceling their subscriptions may simply prefer to pause their subscriptions, if it was an option. This usually happens when your customers want to temporarily stop the subscription to minimize their expenses, are using your product less frequently, or lack access to your service for a limited time.

Using Cancel Flows to Keep Customers

Customers prefer to feel they’re in charge of their accounts and can choose to leave when they want to. It may seem counterintuitive, but be sure to incorporate “cancel flows,” or clear paths within your applications and customer portals that give customers the option to cancel your service. At the same time, however, you’ll want to remind them of the great services and growth opportunities (not to mention possible discounts) they will miss if they leave.

  • Offering free “trial” upgrades for a predetermined period of time
  • Discounting upgrades to reward loyal customers
  • Offering discounts for converting to a recurring billing plan for more convenience

Track Pre-Cancel Events

Ultimately, it’s all about timing. In order to fight customer churn, you must find a way to analyze past events and predict your revenue stream well into the future. This means using better tools to detect exactly what behavior your customers exhibit before they decide to cancel their subscriptions.

  • Customers who go silent and stop logging in regularly
  • Customers who constantly seek help and start to complain that their questions aren’t being answered
  • Customers who provide feedback on features they want you to add, but don’t feel like their requests are being addressed
  • Customers who just decide not to update their payment details

Test and Optimize your Shopper Support and Renewal Processes

Sometimes, the renewal process might be more complicated for your customers than you think. If this is the case, higher churn rates instead of increased renewal rates may result. In order to avoid this, don’t just rely on what you think might work for your customers, but instead try to perform tests on renewal notifications (templates, timelines, prices), renewal emails, migration campaigns and more to see what actually works, and what doesn’t.

  • Modifying shopper support flows grew customer retention by 50%
  • A/B testing on renewal notification elements such as templates, timelines, and prices decreased chargeback requests and refund rates

Collect Feedback — and Act on It

To reduce voluntary churn, you can’t just make assumptions about why people want to leave your brand. You have to figure out exactly what these customers needed and didn’t get from you. If you give customers a chance to talk and are willing to listen, they’ll tell you what is truly important to them.

  • What is the main reason you decided to discontinue using our services?
  • How can we provide better communication and customer support?
  • Could you please share any other comments or concerns so we can build a better relationship in the future?

Adapt Your Churn Prevention Tactics to the User

In addition to making it easy to cancel and listening to feedback, there are many effective churn prevention strategies that focus on the user. Consider usage-based targeting; cohort analysis (which looks at your customers in relevant groups, rather than treating everyone as one unit); and customer segmentation as ways to determine which customers are most likely to use your product, as they are likely your biggest advocates while also being your most “high-risk” clients.

In Conclusion

Whether it’s creating cancel flows, collecting feedback, or converting your customers to auto-renewal, there are many tactics you can employ to combat that dreaded enemy, voluntary churn. The secret is to test them out for yourself and see which ones suit your subscription business the best.

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2Checkout (now Verifone)

2Checkout (now Verifone)

2Checkout (now Verifone) is the leading all-in-one monetization platform for global businesses built to help clients drive sales growth across channels.