Should I stay or should I go – How can subscription-based companies face the ‘Great Unsubscribe’?
‘Should I stay, or should I go (unsubscribe)’, that is the question consumers, on a global level, are asking themselves as the cost-of-living spikes. They now think twice about their expenses, including their subscription plans.
Research has shown that concerns about rising costs have prompted 7 in 10 adults to be more selective about the services they use.
As of June 2022 (Statista), the most common reason for cancelling subscription services worldwide is because of high prices during the crisis, especially since cancelling a subscription is of little impact.
Even more scary than that is the fact that 29% of consumers WORLDWIDE have cancelled at least one of their current subscriptions (YouGov) in 2022 compared to an average of 8%.
Unfortunately for subscription services, this dip in subscribers comes as a shock after it experienced massive growth in 2021 with an increase of 41% in revenue.
“Subscription businesses, which grew so rapidly over the last two years, are now facing a market turned upside down. How quickly they adapt will determine their survival” – Forbes
As such, for subscription services, the question that rises is: How can I retain my subscribers no matter any economic situation?
We’ve got the answer for you: offering your customers THE best experience there is (aka making them not even think about cancelling their subscription because they are that satisfied).
Before jumping to a few reasons to invest in an experienced, 24/7, all-language, customer support team, here are a few data that will prove the importance of customer retention:
Just a few pieces of data as to why you should focus on retaining customers, by all means necessary:
Increasing customer retention rates by 5% increases profits by 25% to 95%, according to Bain & Company.
Acquiring a new customer is five to 25 times more expensive than retaining an existing one (Harvard Business Review)
And now for the reasons to invest in customer support teams to keep and delight your precious subscribers :
1. Excellent customer service reduces your churn rate
This should not come as a surprise. Poor customer service is the leading cause of customer churn. Churn because of poor service stands at 43% according to TechSee. By all means, do not underestimate the detrimental effect of poor customer service!
Especially in these difficult times when customers need to tighten their belts, you may want to provide them with direct answers, at all times! Don’t keep your customers waiting, and don’t give them an argument to unsubscribe.
2. Best-in-class customer service increases customer lifetime value and is a competitive advantage
Investing in an experienced and skilled customer service team is an excellent way to improve CLV (customer lifetime value).
If customers have a great experience with your customer service and are immediately satisfied, they’ll be more likely to remain subscribers but also to subscribe to your more premium plans for example. Or at the very least, they are more likely to share their positive experience with others which could lead to new potential customers. In business terms, outstanding customer service can lead to upselling and cross-selling.
Today, because of the economic situation, you simply can’t afford to be ‘second best’ in your industry.
Consumers will be choosing for 1 (if none) service in the industry. Customer service can act as a differentiator for your company. So, stand out of the crowd, stand strong in front of the crisis, and resolve any customer complaint within a split second.
3. Proactive customer care creates marketing opportunities
Consider adopting proactive customer service if you’re looking for an effective and cost-efficient way to delight your customers and increase their stickiness. Instead of having customers report issues, a proactive customer team can reach out to them before they even know that an issue exists. Doing so could show customers that you are constantly working to improve their user experience.
Customer service teams do not only work towards customer delight, but they can also act as a marketing tool for introducing and promoting your new products and services. Let’s say you developed an amazing feature on your platform which would solve problems, well, your customer service team could refer it to customers themselves giving out a personal approach than a marketing campaign.
Proactive customer support is more crucial than ever, especially when it comes to retaining customers.
How to predict the churn of your subscribers and retain them?
This is how we can support you
Are you trying to understand why you are losing your customers? Are you regularly noticing that some of your customers in your database are deciding to break their contracts?
At the end of the day, you have a customer database that includes information about them, their contracts, data from your customer service department, and other data that identifies them, are you are wondering how to make all this information ‘talk’ to you, in order to identify the profiles that are about to ‘churn’, anticipate their behaviour and retain them?
The Nest by Webhelp is an outsourcing company for startups and scale-ups and with our Consulting and Data Analytics services, we can implement churn analyses by:
Identifying the main factor behind attrition
Building an algorithm to measure the overall churn risk for each customer
Illustration of a potential churn prediction & retention process
Collect and enrich your data
Collection of your CRM data (contractual, customer, behavior, NPS etc.)
Enriching your data with open data (demographic for example)
Creation of a study data set
Realization of the first data management operations
Analyze the first trends
Analysis of your customers’ churn behavior (e.g. average age, unexpected bills, customer service dissatisfaction)
Measuring the first gaps between active and lost customers
Create a churn prediction model
Defining our assumptions of success
Selection of the best algorithm
Creation of the model on a learning sample
Validation of results on a test sample
Implementing retention solution
Definition of retention criteria according to the risk level of your customers (discounts, cocooning etc.)
Definition of your customer retention solution (outbound calls from reassurance, sending a “promotional e-mail”etc.)
Implementation of a monthly scoring to calculate the churn risk within your customer portfolio
Measurement of the real ROI after a few weeks of application of this algorithm
4. Great customer service improves brand image and loyalty
In many ways, your customer service team is the face of your brand. They are the ones who are in direct contact with your customers. Did you know that 61% of consumers who receive poor customer service cut ties with a brand? Imagine that percentage now that they need to reduce their expenses.
Make sure you have a skilled customer team on your side that would deliver your brand image!
5. Keep customers at bay with voice channels to proceed with cancellations
One way to keep your customers from unsubscribing is by implementing a voice channel to cancel subscriptions.
By doing so, they will have to talk to agents who will try to understand their reason for cancelling and perhaps even convince them to do otherwise