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Subscriber Churn

Getting Tactical About Subscriber Churn

Churn is only a good thing when we’re talking about ice cream. When you’re developing an app, churn can be your nemesis. According to Tech Crunch, the median churn rate for subscription apps is 13% for monthly subscribers (higher in the first few months) and around 50% for annual subscribers. The good news is that while some subscriber churn is inevitable, there are proven strategies you can use to combat churn before it happens.

Defining Subscriber Churn

The simplest way to define subscriber churn is to look at the percentage of subscriptions that were lost during a given period and never resubscribed.

Churn = (Number of subscriptions expired or canceled during time period – Re-subscriptions) / (Number of subscriptions at the start of the time period) * 100

It’s also important to track cohorts when you look at your churn numbers. By segmenting your users, say, by stage in the lifecycle journey, for example, you would be able to see how many users abandoned their free trial, unsubscribed shortly after converting to a paid subscription, or let their subscription expire after several years. If you offer a monthly versus. an annual plan, and if you have various product tiers, it’s also important to be able to segment your metrics by each offering.

Measuring Churn Across Channels

Most product marketing and growth teams will be familiar with the concept that you can’t improve what you don’t measure. So, the first step into fighting subscriber churn is to track activity and dig into the numbers to understand where and why it’s happening.

If your app supports multiple platforms, it’s essential to have the full picture of where your churn is happening across iOS, Android, and the web. If you only track events that happen within your app, for example, you may miss a good portion of churned users on other channels. Subscription cancellations often occur outside of the app, such as over the web or via email.

Plus, you’ll most likely want to use different strategies and messages for different channels, since users will come to mobile or web with different goals and needs. And, every channel has its own technical nuances and specifications. (This is why we partnered with Iterable. Now, your marketing teams don’t have to manage this complexity and can focus on crafting the perfect message for each stage in the user’s journey.)

Combat Churn Before It Happens

Once you have a handle on where your churn is happening, you can start to create a prioritized plan. Your strategies for making sure subscribers don’t churn in the first place will depend on where it’s occurring in the buyer funnel.

Trial Canceled

If your app provides a free trial, you’ll most likely see much of your churn happening in users who cancel their trial and/or don’t convert to a paid subscription. This might come down to the product experience. For example, 80% of users say they’ve deleted an app because they didn’t know how to use it. If you can determine that users are churning before they even complete your onboarding flow, you’ll know you need to tweak the in-product experience. You can also use omni-channel messages to encourage users to complete the onboarding process—for example, “one last step to go!”

It’s essential to make a great first impression, so when a user is trying out your subscription service, make sure to keep engaging them in ways that build brand trust and loyalty. If they encounter any problems, be sure to have an option for in-product customer support.

Billing Issue

According to a recent study, 27% of subscription customers experienced a payment issue in the last year. When customers can’t pay for your product or can’t easily fix the billing information that you have on file, you’re going to see churn as a result. It’s important to identify billing issues when they happen, so you can follow up with the right messaging and make sure that any problems are quickly rectified.

Monthly Subscribers Canceled

It’s most common for users to cancel within the first few months of a paid subscription (they might have intended to cancel their free trial, but missed the window). For that reason, it’s important to keep new monthly subscribers engaged with what you have to offer. You can essentially treat the first few months of a subscription as an extended onboarding period for VIPs.

Common strategies include marketing new premium features using push notifications, or sending invitations to exclusive subscriber-only events, webinars, or previews. With cross-channel communication, it’s easy to reach your subscribers in the ways that work best for them.

Annual Subscribers Canceled

Annual subscribers may require slightly different tactics, since it’s most common for them to churn at the end of the first year of using your service. Email marketing is one way to keep subscribers engaged with descriptions of new and upcoming premium features. Offering a discount on the annual subscription in the weeks before their subscription is set to expire can also be highly effective.

After Churn Happens: Running Winback Campaigns

When you inevitably do have subscribers cancel, you can try to retarget them with winback campaigns. Not all hope is lost: one recent case study found that apps that sent emails to churned customers won back over 20% of their customer base. To run an effective winback or re-engagement campaign, it can be useful to ask the subscriber why they’ve decided to cancel.

This allows you to personalize your strategy. For instance, you might choose to offer a discount for someone who found the subscription too expensive. The right customer information gives you the ability to build individualized interactions and deliver follow-up messages that speak to each person.

How Iterable’s RevenueCat Integration Can Help

Using Iterable with RevenueCat is a great way to arm yourself with the tools you’ll need to reduce subscriber churn. RevenueCat takes care of all the in-app payment infrastructure for your app and provides built-in subscription lifecycle analytics to track churn, trial conversions, and retention. You can easily slice and dice by specific cohorts and conversion channels. The data is always synced and merged across platforms in near real-time, capturing every event that happens with your mobile subscribers.

To start running a targeted anti-churn campaign for your app, it’s just a matter of sending RevenueCat’s subscriber lifecycle events to Iterable. In just a few clicks you can set up RevenueCat to send subscriber events like “Trial Canceled,” “Billing Issue,” “Cancellation,” and “Expiration” to Iterable. Then, you can use these events to trigger personalized cross-channel messages, and even layer data from Iterable to further segment your messaging.

Understanding your customer and how they prefer to interact with your brand is half the battle. Having the right marketing infrastructure in place, consolidating tools into a single source of truth, bridges the gap between data and activation. With data being used to benefit the customer experience, you’ll increase customer loyalty and reduce subscriber churn.

Interested in learning more about this partnership? Check it out.

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