Churn Management: Build lifetime relationships

Understand passive and active churn

Too many subscription services try to overcome the drain of churn by investing ever more in paid acquisition of new customers. That’s expensive. It’s cheaper to keep your customer than to find a new one. You need to do everything you can to stop passive churn, which happens when a recurring transaction fails. And stop active churn, which is when a subscriber cancels. Then, you have offer the user experience and value that turn a good service onto a lifetime must-have.

Consider some of the top reasons people churn:

• Failed transactions that can’t be fixed with basic retry logic, account updaters, and pestering subscribers to update their payment method
• Lack of regular engagement, leading people to actively cancel due to low use of your service
• Temporary factors, including job loss, seasonal interest in a service, extended travel, or income fluctuation, also drive active cancellations
• Low perceived value as compared to other options, such as bundles available elsewhere, are increasingly a factor in active cancellations
• Limited or frustrating user experiences, such as confusing buying flows, drill-down style navigation, or lack of personalization, contribute to active churn, especially when combined with another factor

Failed transactions, otherwise known as passive churn, account for 30% of all churn. The other reasons cover active churn, with lack of engagement being the top cause of intentional cancelations. Vindicia tackles each cause.

Access the subscription checklist to learn proven tactics for overcoming churn ›