Having a low customer retention rate or seeing your retention rate drop is disheartening for any subscription business. With the current economic pressures we’ve seen a number of companies experience an influx of customer cancellations, and though customer churn can’t be eradicated in its entirety, it is certainly possible to create processes and introduce features that incentivise higher rates of retention.
Why is customer retention so important? Can’t its negative effects be fixed by gaining new customers?
Now, don’t get us wrong - new customers are great. We’re certainly not telling you to avoid trying to grow your customer base altogether, but a lot of companies aren’t aware of the value that their current customers have. Not only is it expensive to run campaigns to attract new customers, but loyal customers can also provide your business with a number of valuable things, including feedback on your products and customer journey, a strong brand reputation, and greater insight into who your ideal customers are.
So, how can you increase your customer retention rate?
Reduce Customer Churn
- Do Your Research
Finding out more about your customer and why they want to cancel their subscription is the most important step you can take towards reducing customer churn. By identifying the main causes of churn for your subscription company you can directly address the leading issues that lead to customer cancellations. Although not all causes of churn can be resolved, such as external economic pressures, acting on those that can be resolved will reduce a large pain point for your business.
- Offer Flexibility
Embracing flexibility in your subscription offerings such as by including the options to downgrade or miss a month of your subscription can help you to bridge the gap between active and cancelled subscription accounts. By allowing your customers greater control over their subscriptions they can alter the specifics of their subscription rather than being forced to cancel their subscription plan if it doesn't fit their needs for a period of time.
- Optimize the Customer Experience
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Incentivise Customer Loyalty
- Accessible and Reliable Support
Difficulties in accessing support can create a number of complications for customers, especially when it comes to complex subscription offerings such as SaaS. By ensuring that customers can easily gain support from your team you can make customers feel valued, and such positive experiences go a long way in contributing to customer loyalty.
- Free Trials and Customer Rewards
Every customer loves a bargain and it's a great idea to reward customers that have been with your business for a long time. Coupon codes, free add-ons, or even free trials of new subscription offerings will support the growth of a positive relationship between your brand and its customers, leading to increased customer satisfaction and loyalty.
- No Hidden Information
Hidden information is customer churn's best friend and customer loyalty's worst nightmare. Your customers want to feel well informed and able to trust you as a brand, which is why you should be fully transparent on the specifics of your subscription offerings, such as price, additional fees, and renewal dates.
Billforward has a wide variety of subscription and recurring billing features targeted to assist your subscription business in achieving its goals. Whether you’re just starting out with subscriptions, looking to see how you can increase the flexibility of your offerings, or focusing on expanding your company, see what Billforward can do to help you by signing up for a discovery call today!