April 24, 2023 | Authored by: Shiri Levi-Laor
What a cup of coffee can tell you about subscriber success
It’s 06:30 AM, a second before the morning chaos will start, the only thing I am craving is my coffee. I turn on my fancy machine, open the capsule drawer, and guess what? No capsules! What just happened? What went wrong with my coffee subscription that renews my monthly stock? Upset as someone who is in desperate need for caffeine, I later in the day call customer service, just to find out that my credit card payment failed! And my subscription was cancelled. At that second, I realized I did get a new card with new expiration date but totally forgot to update my coffee provider. That day didn’t go well, I didn’t have my coffee, my coffee provider almost lost a VERY loyal customer, and no one is happy…
What if it could be totally different? Did I want to leave my coffee provider? Hell no! I value the product and the simple experience of having my coffee at my doorstep...but that payment failure created a huge friction, a barrier between a company and its loyal customer.
We are creatures of habit
Great companies build strong consumer behaviors and habits. So do great subscriptions. That’s where loyalty truly comes to life. As someone who understands customer success to the deepest layers of behaviors and expectations, that morning experience wasn’t a success. My subscription failed. I was upset, annoyed, irritated…you get the drill. The coffee vendor invested a lot in building a great program for me to stay connected to its product, so good that I would never imagine leaving it. But the payment failure created what is known as “involuntary churn.” You might be surprised to hear that 30%-40% of churn is involuntary and even more surprising that most of it is avoidable.
Every subscription in the world will face involuntary churn, and on most occasions, it will be due to a failed payment. This is not a given destiny. It’s something we can change and really focus on how we build frictionless subscriber experience, remove all the obstacles that stand in the way of keeping their subscription ticking, and provide a loyal royalty program to each subscriber. And guess what? This will also dramatically reduce your support and operational costs dealing with a very upset customer and also keep the revenue recurring in a seamless and simple manner.
Experience frictionless success
There are hundreds of reasons for payments to fail, and for a subscription business recovering those automatically is a game changer, because Customer Success = Subscriber Success. For that reason, a new KPI that all subscription businesses should keep in mind is how to create a frictionless payment experience that protects customers from experiencing payment frictions.
Does your business have everything covered?
I am sure that my coffee vendor, as most of subscription companies, have all the bases covered:
- Their COO and CCO are dealing with day-to-day operations, ensuring the subscription functions smoothly and focusing on providing high value to their subscribers.
- Their CFO is closely watching the flow, and working to balance expenses versus income, ensuring profitability, especially in the current economic landscape.
- Their CRO has all eyes on the bottom line, looking for ways to maximize and optimize revenue.
- Their CMO is focusing on the brand experience, so that subscribers feel positively about the company and product. (That commercial that made me go try their capsules…it looked so good!)
But there is a common thread that ties them all. And if you have that covered, every department, every C-level executive, and the entire company benefits. We’re talking about perhaps the most important organizational KPI: Subscriber Success!
When a transaction fails, the COO is dealing with a break in the flow of subscription continuity on the technical level. Resources must be invested in reworking the flow back to normal. The CMO faces a broken brand experience, and a brand image that is damaged, sometimes irrevocably. The CRO and CCO are dealing with passive churn and lost revenue, and have to employ a costly call center or customer support team to try to recover customers and revenue. For the CFO, failed transactions have a ripple effect, increasing Customer Acquisition Cost, reducing Lifetime Value, and impacting the bottom line
Ensuring subscription success is at the core of a subscription strategy
When friction occurs, the story with your company is broken. There is a loss of trust, and that disrupts the entire company across silos. It cannot be contained to one element of the business, and that’s why it is so important to take a wide, holistic view to subscriber success. Especially when competitors are actively looking for new customers every single day.
Ensuring subscriber success is about building better relationships between the company and the customer. That comes from building a deep and valuable connection, a loyalty. However, even the most valuable connection can be broken by a failed transaction and a poor experience. (I will be the first to witness). Why wouldn't you just avoid it?
Simple technology, like Vindicia Retain with the smart retry process, would smooth my payment failure and my day could be so different, my experience would be sustained, and I would have my precious morning coffee. Admit it – it’s that what we all want? 😉
How to retain subscribers in today’s post-pandemic environmentDownload