The experience you provide to a customer is a significant factor in their lifetime value (LTV), which determines the total revenue a company can expect from a customer account. Increasing customer retention by 5% can increase profits anywhere from 25-95%, according to recent studies*.
Having a retention strategy for your subscription business is how you maximize the profitability of each customer. Below we will dive into the most effective tactics you should include in your customer retention program.
Mitigating Churn
Whether involuntary or voluntary, churn is terrible for any company, especially subscription companies. Knowing and understanding where churn is coming from is crucial to any retention program.
PayWhirl has a subscription report showing specific details of how long your subscription customers stay subscribed to each plan in the system. It also shows each plan’s total revenue so you can see which recurring payment plans are performing the best overall.
We also have growth forecasts and churn reports that estimate projected growth based on past sales numbers and current churn rates. We calculate the actual LTV for each customer and display it on the edit customer pages and customer-related data exports.
These analytics can help you track LTV from a high level so you can focus on the specific plan(s) that have the most churn.
Decline Management Automation
Involuntary churn happens without the customer taking any action to cancel their subscription. This takes place mostly when payments fail due to generic declines, temporary holds, invalid card numbers or expiring dates, etc.
According to a recent study, 7.2% of customers are at risk each month due to involuntary churn*.
Having a successful decline strategy ensures customer billing information is current and up to date. Being efficient with decline management can actually negate a majority of involuntary churn, lift revenues, and raise past-due invoice recovery rates as well.
PayWhirl provides all accounts with tools to help manage failed payments and automate the collection process. With built-in tools like dunning, invoice re-scheduling options, and email payment reminders, businesses can easily automate and manage their decline strategy. PayWhirl customers also get to control the number of attempts AND days between failed payment attempts with our dunning controls.
Customer Engagement
If businesses resolved issues during a customer’s first interaction, 67% of voluntary churn could be avoided*. Having a bad experience or unresolved issues will make anyone walk away and forget about your brand. Customers are known to be 51% more loyal to brands who engage with them through their preferred channels*.
PayWhirl gives you full control of customizing emails. You can use our default templates or customize them using logic and data from your customers; this will tailor the content for your business. We provide “variables” and “objects” for customization. These variables are used to inject data into your template and customize from within your PayWhirl account. And each email contains objects relating to the type of email that is sent.
We have self-help documents here to walk you through the process
97% of consumers are likely to be loyal to brands that ask for and apply their feedback.
Customer Retention Strategies
Communicating with customers reminds them of your brand. This opportunity allows you to leverage personalization by adding personality when interacting with them. It also doesn’t hurt that 56% of consumers feel personalized communication improves their consideration of your brand.
Customer Support
Subscription shoppers have high expectations and the opportunity to jump ship anytime if expectations are unmet. The list of factors contributing to a customer’s experience is endless; however, you should be aware of why customers cancel their subscriptions.
Customer Service is the reason 70% of customers cancel their subscription
Customer service is bundled these days and includes several vital parts that contribute to your customer’s experience. The more support options and information customers have to get the most out of your product/service to avoid problems, the more involved they will be with your company. According to a recent study by Shopify, fast, friendly, and consistent service is the gold standard for retention and customer service.
PayWhirl has a customer portal that gives your customers control to manage their account and subscription information at their convenience. You control what they can change or update, but the portal gives them the independence to make those changes; without having to call you, saving everyone time and money. We have a support document, How customers manage their own account information. You can include either the welcome email or your onboarding process if you have one.
Subscriber demographics today prefer the self-help approach. This will ultimately lead to an ROI; if you pay attention to their habits and give them what they need to stay interested, loyal, recurring payment customers.
Loyalty & Affiliate Programs
Having a program that rewards customers per their shopping habits and frequency is one way to retain your recurring subscribers. Consumers feel loyalty programs make them more likely to continue purchasing from the brand, 81% according to a study*.
Offering incentives like a free tote for spending a certain amount of money is another great way to keep customers interested. A recent study found that 85% of Gen X subscribers say discounts are what influence their repeat purchases.
Using incentives to keep your customers loyal used to be enough. In reality, most consumers make decisions based on the review or referral of another source before deciding to purchase. Welcome to the affiliate program, where supporters of your brand drive loyal subscribers to you for a piece of the pie. If it didn’t work, nobody would use it.
Reward customers for sharing your brand through an affiliate program
PayWhirl customers can integrate apps like ReferralCandy, Affiliatly, Refersion, etc., into their website; you just have to use our Custom Scripts app for 3rd party conversion, tracking, and customization. With a program like this, you only pay for actual sales, which means low-risk, high rewards.
There are other benefits to having an affiliate program in place, but none are as important as rewarding your customers for sharing your brand. They’re loyal and can help expand your brand; they’re excited to get paid for being a customer and reaping the benefits of your loyalty program.
Account Management
Growing your CLV can be done using your customers’ online behavior, like visits to other product pages. Knowing where they spend their time online can help develop growth opportunities for your business, and help offer up-sells cross-sell and plan upgrades.
Knowing your customers’ interests allows you to create a personalized experience for them. In return, the customer knows they can expect consistency, which connects on an emotional level leading to trust and loyalty.
Tracking and compiling all that data takes time and manpower if you want to see an impact on your ROI. Welcome, account managers. Understanding your most profitable customers’ touch points is essential. It makes for a more memorable impact on their customer experience by delighting and saving them money.
At PayWhirl, we allow you to have employees manage your PayWhirl account. You can add account managers with different permissions and access to your PayWhirl account. This lets managers compile data on customers; it also helps them generate the type of personalized content and communication for that customer.
Up-Selling and Up-Grading
A benefit of having your customers’ data and knowing their habits is the ability to provide timed upgrades. Whether they are up-sells or cross-sells, customers are more likely to add to their subscription when they can see precisely how it applies and benefits their situation. Plus, it’s easier to get a loyal customer to buy more at an extra cost.
70-95% of revenue comes from Up-sells and renewals
Rebilly.com
PayWhirl has an upsell widget for offering customers upgraded versions of current products or offering new products in addition to their subscription items. Our upsell widget is designed to work with the pricing table widget in a chain. Customers can create CUSTOM “build a box” subscription packages by selecting upsell(s) they want on checkout.
Up-selling and Cross-selling let your subscribers know about other plan options that may suit their needs better; or products they may have not thought about or didn’t know about. Providing these personalized specific details at the right time shows your dedication to understanding your customers. This ultimately creates a loyal customer you’ll retain long term.
Retention Recap
Retention plans give you the ability to track, understand, and sell more to customers who are likely to become your long-term revenue sources. It also allows you to target customers with special offers and personalize communication. They also help identify your risk customers, giving you the ability to address their issues, turning them into loyal customers.
Caring about existing customers secures future recurring revenue sources. Most customer retention programs rely on the tools your subscription payment software provides. So if you are not getting the tools mentioned above, come and try PayWhirl for free. You can see for yourself how we can help you increase your recurring revenue and retain more customers longer.
Cited Research from Bain & Company
Source, Source 2, Source 3
If you have any questions about customer retention strategies for your business, we’re here to help.
