January 13, 2021 | Authored by: Jesus Luzardo
Four retention strategies that you probably aren’t doing just yet – but should be
Business is booming for subscription-based businesses. Subscription services for entertainment, home goods, connected fitness and other verticals are thriving as a fundamental shift occurs in how consumers buy goods and services.
Amid this rampant growth and fervent competition, it's natural for customer acquisition to be an operational focus. However, take care to not lose sight of customer retention, an equally important facet of subscriber lifecycle management.
Retention can have impacts that reverberate throughout your organization, whether related to involuntary churn or customer perception of value. So, if you're not already employing these retention strategies, you might want to think carefully about instituting such programs
Let's take a look at four leading strategies, as well as the technology you'll need to support successful retention initiatives.
1. Tracking user engagement
Lack of engagement is a top reason for customers voluntarily choosing to churn. Low usage levels equate to low perceptions of value. Yet blanket engagement approaches don't take into account differing customer motivations, behaviors and intent.
In reality, failure to engage stems from a failure to track engagement. With a deep knowledge of your user base, you can more effectively appeal to them with retention strategies.
Measuring key user engagement is critical to understanding how users derive value from your service and what their decision drivers are. Yet which metrics are most helpful? You should accurately track KPIs like:
- Day-over-day change
- Week-over-week change
- Month-over-month change
- Feature usage
- Content consumption
- Churn score
- Lifetime value
- Net promoter score
- Device type
- Connection type
- City, state, country, postal code
- Custom attributes
This intelligence can then inform all manner of other actions designed to nurture long-term relationships.
Usage tracking can improve your retention programs by giving you data to:
- Spot low engagement trends and take proactive measures.
- Boost upsells with targeted promotions.
- Drive higher conversions with one-click actions.
2. Retrying payment failures
Involuntary churn is as damaging as active churn, yet the events that lead to passive churn can often fly under the radar.
Primarily, payment failures are to blame for most involuntary churn. Transaction failures are bound to happen (like when a customer is issued a new debit card but doesn't update their account information in time) but the difference is in how your organization responds.
Dunning can only save around 50 to 70% of failed payments, so you need to take supplemental action to prevent cancellations and capture potentially lost revenue.
A tool that leverages best practices and proprietary recovery algorithms can allow you to improve customer satisfaction by preventing service interruptions, ultimately helping you to recover 30% more failed transactions than what traditional methods can achieve.
3. Personalizing the user experience
Personalization is a fundamental expectation of the modern subscriber. Services that don't personalize — or more accurately, don't personalize to the expected degree — stand to lose customers.
But where does the fuel for personalization come from? Usage and engagement tracking. That same intelligence can be used to drive personalization efforts that retain customers and present a superior experience.
Consider product or content recommendations. Usage insights you glean through metrics tracking can be applied to build personalized experiences that add value and conform with user preferences.
Personalization is also about extending self-service options to consumers. Robust user identity controls, from privacy to parental restrictions, can help you meet expectations for granular controls.
Another piece to personalization is seamless cross-device experiences. Consumers today effortlessly shift between devices, like starting a new episode of a favorite show on mobile and then finishing on a laptop. Single sign-ons can help deliver the frictionless experience consumers demand and keep them engaged and satisfied with the service.
4. Bundling subscriptions
Subscription bundling has become a popular growth tactic — and there's no reason it can't also work in retention. Bottom line, bundling enhances the value of your offering and allows subscribers to access other perks, which aligns with retention objectives.
Essentially, bundling can take three different form
- Organic: Bundles of your own products and services (for example, Apple One).
- Partnership: Bundles built with strategic partners that complement your service.
- Aggregator: Bundles offered from third parties through a singular platform (think telecom companies offering their customers subscriptions to other vendors).
Each bundling type can provide you with a retention advantage:
- Organic bundles can help your customers more efficiently derive value and experience the scope of your products and services.
- Partnership bundles can take your service from a "nice-to-have" to a "must-have," high-value bundle.
- Aggregator bundling can allow your subscriber base to access new value and depend on your service even more.
Amid increased market competition and saturation, any way to boost the value of your offering is an opportunity to capitalize on.
If your subscription platform can offer consistent value in other areas beyond the core offering, customers may be more inclined to stay long term, as well as become brand evangelists.
Innovate your service and improve retention with Vindicia
If you aren't currently using any of the above retention strategies, it will likely help if you adopt them — and quickly. However, it can be more challenging to find a software solution that will allow you to execute such initiatives and build an effective retention program.
Vindicia has the technology you can trust to drive retention, whether through Vindicia Retain or MarketONE. You can depend on our solutions to power subscription management, data analytics, churn reduction and intelligent bundling.
Contact us today for more information.
Don’t hide the cancel button: 14 strategies for better subscription retentionDownload