Subscription Churn Strategy: The ABCs of Creating a 7-Step Plan

For SaaS, subscription and membership site businesses owners, designing a churn strategy around customer retention truly is not only fundamental — it’s elementary, in fact.

Subscription Churn Strategy: The ABCs of Creating a 7-Step Plan


Conversion strategy, check. Marketing strategy, check. Churn strategy, not so much.

It’s easy to focus on gaining new customers, but more difficult to prioritize keeping them, especially when you feel like your customer churn has gotten away from you.


As a SaaS subscription or membership site business owner, how do you ensure your customer churn is reduced and you increase the retention of the customers you have tried so hard to get?


You can find hundreds or thousands of different strategies to keep your customers, but that won’t mean a thing if you don’t put all these ideas into a useful and practical retention strategy that will “do what it says on the tin” – i.e. keep your customers from canceling their subscriptions.


Below are the essentials for creating a subscription churn strategy to retain your customers:


1. Calculate your churn


Before you can make a plan, you need to know where you’re starting from, so working out the level of your churn is vital before you start thinking about writing a churn strategy.


Ideally, you should know the answer to questions like:



All these metrics are important in determining what needs to be fixed when it comes to customer churn. Although it seems like it could be easy to calculate your churn, there are lots of complexities to getting an accurate number of your churn.


You may need to break down your customers into different segments and cohorts. Think about things like seasonal customers, different counts and episodes, etc.


If this sounds like a daunting task, you aren’t alone. Accurately determining the level of churn can be so complicated that it’s no wonder that some business owners just don’t do it or spend their time going down a rabbit hole and coming up with skewed results.


The good news is that, at Gravy, we’re experts in working out the real costs to your business when it comes to customer churn. We work out things like the compound effect of customer churn.


With most of the business owners we’ve worked with, the customer churn is an eye-popping amount as opposed to the figure they originally thought of.


Don’t waste any more time trying to feel your way through the dark when it comes to working out your customer churn numbers.


Book a coaching session now to find out how we will be able to give you the accurate number of your customer churn and also how we can work together to reduce this number.


2. Know your customers inside out


Your customer profiles and buyer personas are a good starting point here. If you’ve already drilled down on these two important aspects of knowing your customers, make sure that your information is updated and current.


If you want more information about creating and updating the best buyer personas, check out this HubSpot blog with free templates. Go over your customer profiles and buyer personas with a fine-tooth comb.


Have a look, and review the following:



Having this bird’s eye view will help you to find out what’s working well for your customers and what’s not. This part of understanding your customer should be done throughout your whole business, not just on the customer service side.


3. Consider taking on a churn-reduction partner


And by this, we don’t mean collection agencies, as most of them have tactics that could kill your business. Collection agencies normally try to frighten your customers. For example, they threaten legal action and scare and intimidate the customer into paying what’s owed. This will only serve to scare away your customers — and they’ll never come back.


Collection agencies are also known for waiting too long. In terms of churn, the old saying that the early bird catches the worm is spot on. Most collection agencies can wait up to 90 days before they start contacting your customer.


The effective, modern and reliable way to identify a churn-reduction partner is to find one that has a full-time focus on reducing churn in your business. This partner needs to have a proven communication process, which would personalize follow-ups that act as a buffer and a human face to dunning software.


Lastly, your churn-reduction partner should also have the visibility, which allows your business to be relatable to your customers and provides measurable payment recovery so you can focus on measuring everything else in your business.


Gravy provides all these services and more. To find out how our program and full-time focus on customer retention can help your business, book a coaching session now.


4. Assess your user journey


You may want to separate yourself from this process. Because being the creator of your SaaS business or membership site, you might be too married to what’s going on — and, ultimately, your perspective may be skewed.


If possible, you should get someone who’s independent to go through the whole customer journey and provide honest critique about what they thought were the sticking points. Create a map of the feedback that you’ve received to find out what parts of the customer journey worked well and which areas need to be improved.


For a 360-degree view of your user journey, you should review different aspects. For example:



You should steer the person who is going to be evaluating your customer journey to think about things like:



This assessment will help you to identify the processes that provide the most risk in terms of customer churn. At-risk moments normally include the onboarding process and the first pay period. If your service is paid for on a monthly basis, your customer might sit back and look at what’s happened during the first month to decide whether they’ll continue with your service. You should also review complaints to find out which ones are the most frequent because this is a big risk identifier and a red flag in your business.


5. Get your entire business onboard with customer retention


You have to embed a culture of customer retention in your company to reduce churn. Your subscription churn strategy should include how each department will include retention into how they work. Different departments will have different ideas about what customer retention means. You need to gather all this information and have a way of drilling down to include it in your churn strategy. Everyone in your company should be focused on getting new customers as well as retaining them and reducing churn.


6. Create your action plan


After you have gathered all the information above, it’s time to put this into your churn strategy. Your churn strategy should be a working document, which is reviewed periodically at least once every six months (or annually) to find out what needs to be changed and what needs to be updated.


Your churn strategy should never be sleeping, just like retaining customers should always be alive and dynamic.


So, to write your churn strategy, you can focus on the following things:



7. Utilize analytics


Your customer churn strategy should be a living and breathing document. Therefore, you need to incorporate methods to discover whether the strategies you are implementing are actually working. Have measurable goals for each of your strategies so you can review and tweak as necessary. For example, one goal could be a reduction in churn by 20% after improving your onboarding process.


You will benefit from Gravy’s analytics that show you how much your customer churn has decreased and how much you have recovered from failed credit card payments.


We help some of the top marketers drastically increase their customer retention rate. Check out the client love here.


If you want to be our next success story, contact Gravy today for a chat to find out how we can be a practical and useful part of your customer churn strategy to recover payments that are due for your subscription-based business.



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