5 Tips to Lower Subscription Burn Rate

Are you running a subscription box business? If you are, then you’ll know that acquiring customers is only half the battle, you need to ensure you retain them. This is essential given that the cost of acquiring customers is roughly seven times higher than the cost of retaining existing customers (source).

Below are our top five tips for lowering your churn rates, though we urge you to seek advice from an eCommerce agency to ensure that your ongoing strategy is the most effective for your particular business.

1. Offers and rewards

Simple but effective, providing loyal customers with offers and rewards is a sure fire way of proving that you value their custom. It also increases the perceived value of the subscription package they’re receiving, even if the reality is that the cost of providing this extra bonus is relatively small.

Regular rewards – every quarter, for example – encourage users to stick around. It’s also a good idea to ask for customers’ feedback on the offers and rewards you provide, showing that you listen to their opinions and boosting positive brand perception.

2. Additional value through content or education

Added value needn’t purely be through offers and rewards; you can also give your customers tailored content which can increase their enjoyment of the products in your subscription box.

For example; if you include new products in every delivery, you could give customers usage tips or interesting background information. Go one step further and encourage customers to share their experiences of using the product, then curate a gallery page of user-generated content which builds a sense of community. This is particularly effective for activity-based boxes (crafts, recipes, sports etc.).

3. Teasers and sneak peeks

Give customers a preview of what’s coming next by adding pictures and factoids to your boxes which showcase one or two new products that will be arriving in the next box. To follow up, you can post teasers on social media to remind customers of what they have to look forward to.

4. Top notch customer service

Investing in quality customer service – be it through staff training, software or outsourcing – is essential for any business. A worldwide study, conducted by Microsoft in 2017, found that 56% of respondents broke away from a brand due to poor customer service (source).

5. Create tiered pricing

The number one reason for customers churning is cost, so creating tiered pricing and scaling your subscription boxes accordingly can give customers affordable options. Rather than cancelling completely, they can simply downgrade to a smaller, less expensive option. Team this with a user-friendly, self-service account and you’re onto a winner.

Treat each tier as separate products; don’t just take things out of your regular box and expect it to be well-received.

BONUS TIP: Check out the competition!

It’s important to know who your competitors are and where your product sits within the overall marketplace. Look at the top performers in your niche, then those from outside your niche which are popular. This is an excellent way of seeing what works and allows you to identify the features that your customers will likely expect from your products and service.

• Freedom Japanese Market has an extremely strong tiered pricing strategy.
• For customer service and easy product customization, Graze leads the way.
• Birchbox has created a community of beauty enthusiasts and benefit from user-generated content across multiple social channels. They also have a dedicated magazine and provide tutorials for using the products they supply.

Unsure where to start? Consult an eCommerce agency for advice on developing your subscription model.