How to reduce Subscription Churn Rate on Your Shopify store?

by | Oct 31, 2021 | 0 comments

by | Oct 31, 2021

To boost Shopify subscription revenue, you’ll need two things: Stable Incoming subscriber growth and low customer churn.

Reduce churn (the rate at which a company loses subscribers or customers due to cancellations and cart abandonment) and grow your Shopify subscription business. As a result, you’ll increase the average lifetime value of your customers, which means higher ROI for every marketing dollar spent, greater brand loyalty, and mor e confidence in your future growth.

So here we go for the best tips to reduce the subscription churn rate for your Shopify store in 2021 and beyond.

What is the definition of subscription customer churn?

Subscription churn is the term used to describe the loss of clients who had previously financially supported your subscription. It can be expressed as a proportion of consumers who left during a specific period. For example, if you started 2020 with 500 clients and concluded it with 460, your year-over-year churn rate is 8%.

The equation for churn rate= (Number of lost customers/Total customers at the beginning)*100

The churn rate can be calculated in a variety of ways. You may, for example, calculate it using the Value of lost subscriptions rather than the number of individual consumers. The goal should be to keep your churn rate as low as possible, regardless of how you arrive at your data.

Shopify’s Subscriptions are Growing

Ecommerce subscription sales are nothing new, but there has been a significant shift in the way people think about ecommerce and subscription-based products in the previous decade.

According to McKinsey data, the leading online subscription sellers increased by roughly 100 percent between 2011 and 2016, moving from $57 million in 2011 to $2.6 billion in 2016. This trend is even more pronounced in the Shopify subscription landscape, where ecommerce subscription sales have increased by 4,461 percent over the same period.

Here are the nine major strategies to reduce churn rate

I want to share nine techniques for reducing the churn rate of consumable goods brands through subscription programs or subscription boxes.

1.A Spectacular Customer Experience

Your consumers’ experience with your service must be excellent throughout, but it must also be one-of-a-kind in a way that is entirely yours. You want anyone who switches services to feel as if something is missing.

There is no one-size-fits-all solution for every organization, just as there is no one-size-fits-all solution for branding. Finding out what your firm offers that no one else does might be difficult, but it’s an important part of creating a service that customers will want to stick with.

Remember that once you’ve engaged a customer and exposed them to your experience, you should do everything you can to remove friction. In 2019, having a fully responsive website had become commonplace, yet most online retailers are unaware of the majority of why their clients do not convert.

2.Setting Pre-Arrival Expectations

The interval between when someone purchases a subscription and when the first product comes to their home is pre-arrival.

This is the moment to give content or information that will appropriately set their expectations not to be disappointed when they receive the product. When a customer’s expectation isn’t realized, your subscription rate lowers (churn rate rises). As a result, you may use email flows or SMS campaigns to set expectations about what will be in that box.

You can also include a complimentary gift or send free samples. These items will exceed their expectations and entice them to use the products and renew their subscription.

3.Branding is important

reduce subscription churn rate

Customers remember brands with strong, effective branding more than companies whose branding efforts are half-baked or forgettable. It cannot be easy to develop a thorough, consistent branding plan, but it is essential.

Consistency, a feeling of purpose, and an appeal to your clients’ emotions are important aspects of good branding. The advantages of strong branding can seem magical at times, but it’s one of the first things you should think about if you want to increase consumer loyalty and attachment.

4.Nurturing After Arrival

This is the period following the receipt of the customer’s subscription box. You should now send them the information they require to use the product effectively. This will boost adoption and assist reduce churn for the following month’s subscription.

You can accomplish this by distributing video content, inspiring content, instructions, and other types of content via email or any other channel. Then, please verify that the largest possible percentage of people open the box, open the product, and use it.

Growing usage leads to increased consumption. So, instead of cancelling or unsubscribing, they’ll run out of the product and be ready for the next one when the next subscription comes around.

5.Segmentation of Customers

When you have a lot of information or products to offer, you may find yourself presenting your subscribers with things they don’t want. Unfortunately, this could lead them to believe that your service isn’t right for them.

First, segment customers based on their hobbies or demographics, and then create packages that appeal to those segments. You’ll be able to optimize the value you’re delivering while avoiding alienating your clients with irrelevant offers.

6.Respond to the Question

Finding the best price model for a subscription service can be difficult. There are numerous possibilities, and various departments within your firm may have different pricing objectives.

Why are your consumers subscribing, for example, is a question that can provide some insight and clarify. When you put your consumers’ needs first and get inside their thoughts, you may learn a lot about what your service should include and how much you should charge for it.

7.Adding to the Value

Nobody wants to feel like they’re paying to be a customer. Subscribers are more likely to feel like they’re getting a good bargain if you can provide added value and incentives that make them feel like they’re obtaining access and privileges rather than just buying stuff.

Everyone enjoys coupons, special offers, and freebies; however, you can add value to your product by integrating community-building elements, information resources, videos, and anything else enjoyable or useful that pertains to it.

Customers are considerably more likely to keep their subscriptions if they have a reason to keep coming back to you, even if they don’t need the service they’re paying for right now.

8.Change Your Views

Have you always been a subscription-based business? Many eCommerce businesses begin with a traditional business plan, then transition to a subscription-based model after some initial trial and error, as well as an analysis of the data. However, not all of these businesses change their management mindsets or corporate cultures to reflect this transformation.

If you’ve switched from traditional sales to subscriptions, you’ve created a completely new company. However, once you’ve gotten your head around subscriptions, you can look for places where your procedures are still being shaped by the original business model and adjust them accordingly.

9.Detecting Peak Churn Periods

Using data from the previous six months, identify the timeframe when consumers are most likely to churn or unsubscribe. The frequency of your deliveries and the sorts of subscription options will determine this.

You can use email or SMS automations to offer high-quality content that will keep them engaged and thrilled in the lead-up to the peak churn period. Let’s imagine you discovered that the churn period is 60 days long. Customers receive their first month’s subscription and then their second month’s subscription. People are cancelling and leaving the program by the third.

You can use this tool to create a series of email campaigns sent out four weeks before the regular peak churn.

You can employ instructional information, social media content, or social proof in these ads to assist them to feel more confident in their decision. The goal is to persuade them that this was the best buying decision they could have made.

Shopify’s subscription payment apps that assure less churn rate

  • Subscriber: The app will change your admin portal and online store once you install it on your Shopify store. You can view your business summaries and establish business subscription plans via the admin portal. Please go through the getting started guide to learn more about the admin portal’s features. The theme setup area allows you to customize your online store so that your clients can see the subscription plans you’ve put up. The modifications can be installed automatically or manually by clicking the install button in the section. The modifications to the theme are mirrored in the user’s product page and account page.
  • Recharge: Recharge Payments began in 2013 with three persons working together in an apartment under Bootstrap Heroes. Through online subscription sales, they now assist over 10,000 Shopify businesses in growing and thriving. It’s free for businesses conducting less than $100,000 in transactions and acts as an “out-of-the-box” option for any Shopify store looking to start selling ecommerce subscriptions.
  • Bold Subscriptions: It was later added to the Shopify app store as a subscription payment processing solution. It is now used by over 11,000 companies on Shopify Plus, including some of the largest subscription sellers. Bold comes in two price categories and can be up and running on a Shopify store in as little as 24 hours.

Final thoughts

When selling subscriptions, the most important goal is to keep your current consumers. They bring in money for as long as you can keep them, and replacing them is unlikely to be less expensive than figuring out how to keep them on board.

You may improve client retention by implementing these nine tactics. You can design an effective overall plan for dealing with churn when you understand what your customers need, why they’re signing up with you, and what incentives will keep them around.

Best of luck!


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