It’s 25 times costlier today to get a new customer than to retain an existing one. Involuntary churn impacts not only your retention rates but also your revenue, cost, and brand identity. Since its origin, the subscription economy has been building itself to become an extremely competitive landscape, and adopting innovative strategies to keep subscribers happy is key to staying competitive.
Involuntary churn indirectly results from low customer engagement and platform inefficiency in achieving optimization. Building a platform that can understand content viewing needs and anticipate customer issues with payments, invoices, and recommendations is imperative to achieving a highly engaged user base, resulting in significant churn mitigation.
The most asked question in the subscription business is – How can involuntary churn be reduced?
To help you get started, we have defined some effective strategies to eliminate involuntary churn before it affects you. In a nutshell, consider these strategies as good practices that help you stay competitive and serve the changing user needs.
A Clear Path to Reducing Involuntary Churn
Some proactive strategies to derive higher retention rates through customer engagement include.
1. Anticipate Declined Payment with Customer Reminder Emails - When your customer switches banks or receives a new card, they may not exactly know what services rely on that account. By setting up an email system, you can remind your customers about expired forms of payment.
2. Adjust Retry Cycles to Match Bank Practices - To reduce fraud, issuing banks can decline transactions using either a soft or hard decline. Companies should view soft payments as soft declines – setting up retry cycles that allow the possibility that the decline will be resolved.
3. Flag Payments as Recurring - By marking charges as recurring, your company will establish trust and mitigate involuntary churn. This will show that your business anticipates a long-term relationship with the customer.
4. Implement a Payment Method Updater (PMU) - A PMU service automatically updates customer payment information when a new card is issued. This will eliminate a potential issue for the service provider and the customer.
5. Step-down Charging - The Step-Down Charging model can configure product renewal based on the available credit balance in customers’ accounts. The platform will automatically renew user subscriptions weekly, monthly, and quarterly based on the status of customers’ accounts.
6. Enhanced Capture Techniques - Evergent devises advanced customer capture techniques from the data, experience, and knowledge collected from the credit transactions of millions of customer accounts.
Churn reduction is achievable with extensive customer engagement, platform optimization, and personalized promotional strategies. Knowing who your subscribers are and their preferences will bridge the gap. Evergent’s powerful analytics engine derives actionable insights from customer data that help you devise strategies to reduce customer churn rate significantly.
Visit us at IBC2022, booth 5.D32, to watch our demo that will showcase how deriving insights from customer data can prevent involuntary churn before it affects you!
Evergent brings Agility to Monetization and helps in enabling the CTV, OTT providers, and other SaaS-based e-Commerce businesses to acquire and retain new and existing customers by making the payments flawless, reliable, and highly secured. Evergent's market-leading Integrated Revenue and Customer Management platform helps the world's leading communication, media, and entertainment companies reduce time to market for products and services, simplify complex monetization models, and run back-office processes more efficiently. The company is headquartered in Sunnyvale, California, and has offices in San Diego and Los Angeles and internationally in Australia, Canada, India, Japan, and Singapore.