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InContext / An inside look at the business of digital content

How publishers can combat active and passive subscriber churn

March 21, 2022 | By Matt Broad, Director of Optimization Services – Piano @piano_io

The subscription journey doesn’t end at conversion — it’s really just getting started. No matter how successful your subscription program is, you’ll always have customers on the edge of churning, or those you have to win back.

When trying to improve subscription retention rates, it’s important to understand that there are two sources of churn, passive (payment failures) and active (cancellations). Each of these require dedicated tactics to target the users that may be susceptible to churn and keep them as subscribers. By intelligently and intentionally harnessing subscriber data, publishers can proactively combat churn.

Active churn

Active churn is when users are consciously choosing to cancel their subscription or membership with your publication. To keep these users around, you likely need to better engage them with the product and showcase the value they’re receiving.

Communicate value with impactful onboarding experiences

When a new user converts to become a subscriber, an onboarding experience is the best way to get them acclimated with their new subscriber benefits and immediately engage them in the offering. This could include messages welcoming subscribers, encouraging app installs and newsletter sign-ups, and highlighting various subscription benefits. These tactics help to foster the habit of engagement with your content.

As monthly subscribers use the site heavily in their first 30 days, offering a holistic onboarding experience can be more effective than an email campaign alone. On-site messaging can add much more influence in this critical time period. It’s all about communicating the value of the offering.

Use content recommendations to increase usage

Higher content consumption is generally linked to lower churn. By using personalized content recommendations to surface the right content to the right users, publishers can double both pageviews and active time on site.

While content recommendations are most often thought of from an advertising context in relation to increasing pageviews, those additional pageviews also help show users the type of content they’re most interested in and tangibly demonstrate the value of your content, reinforcing the messaging of your onboarding campaign. The more relevant content the user sees, the more they will value their subscription.

Leverage machine learning to identify users most likely to churn

By understanding the users most likely to churn and the biggest drivers of cancellation, you can target messaging or campaigns separately to high- and low-risk subscribers. Machine learning can help you segment these groups based on hundreds of metrics. These can include everything from the referrer at the moment of conversion to whether a subscriber paid with Visa or American Express. With a better understanding of what behaviors are driving cancellation and retention, you can work with your editorial team to encourage the positive behaviors and suppress the negative ones.

Passive churn

Unlike active churn that results from action by the subscriber, passive churn is most often caused by credit card failures or other technical failures.

Extend grace period to try charging cards more than once

A simple but high-impact change that publishers can make is shifting the grace period for retrying credit cards that had a failed payment. Although many marketers never envisioned overseeing the intricacies of payment processing, this has become an integral part of subscription strategy to optimize revenue.

By spacing card retries out five days apart, many reasons for payment failure (such as a maxed-out card) can resolve themselves. The first retry is almost always the most effective, successfully charging an average of 25% of monthly subscriptions that enter grace periods and an average of 18% of annual subscriptions entering grace periods. The second attempt, 10 days after an initial payment failure, also often can have a double-digit success rate. Later attempts tend to get progressively less successful, with only a couple percent of subscriptions successfully charged during later attempts. But even low additional success rates on later attempts can add up to real money for large subscription bases.

Communicate billing updates directly with users

Visitors with expiring credit cards soon to expire are often customers who are satisfied with the product and simply need to be prompted to update payment details. Reaching out to users in advance of card expiration dates, or with billing failures when they happen, gives them every opportunity to update the payment method.

Think of this communication as a service message, rather than a marketing message: “Your payment details are expiring. Please update them here for uninterrupted service.” If the payment method isn’t updated, you may consider increasing the urgency of your messaging in a sequence as the expiration date gets closer.

Initiate a win-back campaign to re-engage former subscribers

The first step in running a successful win-back campaign is understanding which former subscribers are most likely to be won back. While only about a third of churn is passive, a Piano analysis found 55% of subscribers who had a subscription lapse and later re-subscribed were passive churners. This makes sense. It’s much easier to win back a customer who did not intentionally end their subscription than one who did. Former subscribers with a payment failure may not even realize their subscription is no longer active.

Onsite messages targeting this specific user group can be used to prompt former subscribers to resubscribe onsite. Emails sent based on a subscription or access ending event can also be used to run win-back campaigns. Similar to credit card expiration messaging, win-back campaigns can start out simply as service messages: “Your subscription has expired. Please update your payment details to resume service.”

Taking a two-pronged approach can help you address both passive churn and active churn of your subscribers. By prioritizing retention as much as acquisition, you can ensure you don’t lose a single hard-won customer you don’t have to.

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