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Why Making It Easy For Subscribers To Cancel Can Grow Your Customer Lifetime Value

why-making-it-easy-for-subscribers-to-cancel-can-grow-your-customer-lifetime-value

When it comes to managing subscriptions, eCommerce brands and retailers often fear that making it easy for subscribers to pause or cancel their orders will result in a loss of revenue and decreased customer lifetime value (LTV). However, giving subscribers more control over their orders can actually have a positive impact on long-term customer relationships, boost LTV, and even reduce operating expenses.

Why you should make it easy for subscribers to cancel

Easier cancellation = happier customers. And happy customers come back. By offering customers the flexibility to pause or cancel subscriptions easily, brands can enhance customer satisfaction and loyalty. When customers feel empowered and have control over their subscriptions, they are more likely to continue their relationship and re-enroll in subscriptions at a later date. 

Happy customers drive word of mouth. If you’ve made it easy to cancel, then your customers are likely happier and more likely to recommend your business to others, leading to your cheapest channel for customer acquisitions and further revenue growth.

Additionally, easy subscription management doesn’t tax your internal teams, reducing operational costs. Brands who make it difficult to cancel usually see more support calls and tickets, which burden support teams and hurt the business’s bottom line. By implementing an easy-to-use, self-service option, brands can reduce the burden on customer support teams and minimize the resources required to handle cancellation requests.

For example, after Furtuna Skin migrated to Ordergroove to enable subscribers to easily swap a product for a similar item, skip an upcoming order, or pause their orders, their subscription-related support tickets decreased by 50%. 

With all of that said, brands have numerous tools at their disposal to reduce subscriber churn and deliver a positive experience that will win back canceled subscribers at a later date. 

Tips to combat churn and reactivate canceled subscribers

Collect and review data: To gain valuable insights into the reasons behind subscriber churn, it is essential to collect data. By understanding why customers are canceling, you can create strategies that prevent churn. Data will also give you the ability to personalize future communications with customers to potentially win them back. You just might find that many of your subscribers churn not because they don’t love your products but because they’re overstocked. You can then decipher if there are trends by product or customer type and suggest different shipment frequencies that reduce overstock and churn. 

Make it easy to skip: Even if you optimize your subscription shipment frequencies, some customers might have a life event that will eventually lead them to being overstocked on a product. Maybe they went on a long vacation or their kids are in summer camp, so they aren’t using your products as often at a specific point in time. When this happens, it’s important to offer options to skip orders. In fact, subscribers last 135% longer when they have the ability to skip an order.

Streamlined cancel flows: Even if you make it super easy to manage, skip, or edit subscriptions, some customers still might want to cancel – and that’s OK. Rather than create obstacles, you should focus on providing a smooth and hassle-free cancellation experience that aims to understand the reason for canceling and to better personalize the cancellation communication flow. This doesn’t just reduce customer frustration; it allows you to educate customers one last time that they can skip instead of cancel, or even suggest a different product, or put a momentary pause until they’re ready to recommit. Regardless, you’re still getting great data that can be leveraged to mitigate churn and drive future purchases or reactivation at a later date. 

Communicate proactively: By delving deep into analytics, brands can identify patterns and trends associated with subscriber churn. For example, imagine your data shows that a significant percentage of subscribers cancel after their second order. You can adapt your incentive structure to provide additional benefits for the third order and proactively reach out, letting them know about these valuable incentives. Offering added incentives like a gift with purchase, samples, or steeper discounts can entice customers to continue their subscription and increase their long-term value.

Seamless reactivation: Making it easy for customers to reactivate their subscriptions is crucial in fostering customer loyalty. Enabling one-click reactivation options that are personalized based on the data you’ve collected allows you to drive re-enrollment from SMS or email without the hassle of having to log in or reactivate an account. This convenience can significantly contribute to the overall customer experience and drive further loyalty.

If you’re doing all of the above and consistently updating and improving your customer experience, then you should be well on your way to extending your LTV while fostering a happy and healthy customer base who become advocates and help further grow your business.

The bonus of making it easy to cancel? You should see a decrease in support tickets coming from frustrated subscribers. This will allow you to keep your operating costs in check as you grow your business, which is critical in today’s market, where profitable growth is key.

Contrary to common misconceptions, putting your customer in the driver’s seat and giving them complete control to manage and cancel subscriptions can have a positive impact on long-term LTV. Ultimately, by nurturing these connections and providing a customer-centric experience, businesses can retain their most valuable customers and foster a thriving community of loyal customers in the digital age.

Special thanks to our friends at OrderGroove for their insights on this topic.
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