Subscription Box Answers

Retention Secrets: How To Keep Subscribers For A Long Time!

• Liam Brennan

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We all know churn is a killer.
 If your customers keep leaving, you’re building a business on sand.

But if you can boost retention?
 You make more money.
 You grow faster.
 And your business becomes way more valuable.

In today’s episode, I’m sharing 5 secrets that will immediately help you boost your retention and keep your subscribers around for the long haul.

Got a question you want answered on the show?
 Head over to www.SubscriptionBoxResources.com, join the free Facebook group, and drop your question there!

Speaker 1:

Welcome to Subscription Box Answers with your host, liam Brennan. You're no rubbish, no crap. Straight to the point podcast with real, actionable tips, real strategies and insights from the industry which will help you start and grow your own successful subscription box business. You ask the questions, you ask the questions, you ask the questions. Liam gives the answers. It's as simple as that.

Speaker 2:

Welcome back to a brand new episode of Subscription Box Answers. On today's episode, we're going to flip things on the head and we're not going to talk about acquisition and signing up subscribers and growing and all that stuff. We're talking about retention. We all know if you want to build a successful subscription box business, you have to have strong retention. The clue is in the name subscription. These businesses do not work well with high churn. Now we have.

Speaker 2:

We've tried so many different things in BusterBox over the years. We've tested so many different things in BusterBox over the years. We've tested so many different things when it comes to improving our retention and some things work quite well and other things seem to be a complete waste of time. On today's episode, I'm going to cover some stuff we have done which has worked really well and hopefully you can take that, apply it to your own subscription box business, see great results and make more money. Okay. So the first thing we need to make really clear okay and this gets overlooked by so many people in this space Retention starts before the customer subscribes.

Speaker 2:

You can do every single trick in the book to help boost your retention, but if you sign up up low quality customers on aggressive offers, you will have a high churn rate. There's no way around it. I'll give you an example. If you went out on groupon and you done a big deep discount on groupon and you signed up a lot of people on a really deep discount, what would happen? You would have a really high churn rate and there's probably nothing you can do about that. You could literally send out gold bars in the boxes and there would still be people complaining and looking to cancel because they are not the right people. They are bargain hunters, freebie hunters, they want everything for free discount shoppers and they will not stick around long and pay full price.

Speaker 2:

Now. Does that mean you can't run a free box offer? Now, a free box offer can work, not for every niche, but for some niches it can be a really profitable offer. But it just depends on your niche. Like for us in BusterBox. We signed up way over 10,000 customers on free box offers and a lot of them stuck around for a very long time. But I know other subscription boxes who went really aggressive with the free box offer and it never worked out too well. So yeah, it's all about your niche and testing it and not jumping in too much without running the small test and checking what the churn rate actually is.

Speaker 2:

But that's something you do need to be aware of. And something else you need to be aware of is the type of plans you're pushing people into. If you're doing offers on rolling one month subscriptions, the likelihood is you are going to have a high churn rate, unless you're doing something like dog food or something in that category. But for a discovery surprise subscription box, if you put your offer on a roll in one month, you probably will have a higher churn rate because you're not attracting the right people. You're telling people they can come in and take the offer and leave without any commitment. Now, when you switch that up and you only put your offer on the six or the 12 month plan, what's going to happen? Well, you're attracting people who are actually interested in the subscription. Well, you have a better chance of attracting people who are actually interested in the subscription. Well, you have a better chance of attracting people who are actually interested in the subscription and they know to get the offer, they need to commit for six or 12 months. And you need them to commit for six or 12 months if you want the numbers of your business to work Now, we obviously use Subli and they have commitment terms built in and that allows us to put all of our offers on our 6 and 12 months and it works really well for us.

Speaker 2:

Now I will say, over the years, right, I have come across a lot of different people who have tested the offer on the roll in one month and I can tell you I would say in about 95% of situations they had a high churn rate. Doesn't mean it won't work for you, but I'm just telling you what I am seeing. Usually, if you put the offer under one month, the churn will be quite high. Now, when I'm talking about six and 12 month commitment terms and subly and all this stuff, this stuff is there to help you, okay, but one thing it definitely isn't there to do is lock people in for six or twelve months. You can't do that. If people don't like your subscription box or find value in it, or if you give them a poor service, you won't be able to keep them locked in for six or 12 months. It really doesn't matter what they clicked when they were signing up. They will give you bad reviews, they'll hammer your customer support, they'll do chargebacks and it's just not a good thing to do. You should never keep people hostage in your subscription box. If they really want to go, you should let them go. That's what we do in BusterBox. But the 6 and 12 month commitment terms commitment terms yeah, they're just a tool you can use to amplify what you're doing if you are providing a good service and if people do like your box.

Speaker 2:

But the point I'm trying to get across with this is right. Retention starts before you even sign somebody up. It starts from targeting the right customers with the right offers and with the right marketing channels and putting them on the right plan. Now the next thing I would bet the majority of your churn comes within the first three months. That's what happens in BusterBox and that's what happens in every subscription box I have ever looked at. The majority of churn comes from month zero to month three, and if you get them over the third month, what usually happens is the churn rate will drop quite drastically. Okay, now, if you want to check this for yourself, you should go into your metric software and you should filter your churn rate to people that have paid more than three payments and see what it looks like compared to your overall churn rate, and my guess is it will drop quite a bit. Now why does this happen? Well, it's because in the first three months, a customer is more likely to churn because they may not be the right fit for your subscription. You may have done a poor job on boarding them. They may have never wanted a subscription, they just wanted an offer. And they're sticking around for three months, but they're not going to pay any more.

Speaker 2:

Pretty much there's many different reasons, but my advice to you to help improve this is number one make sure you have a very strong onboarding sequence so they know exactly how your subscription box works and what to expect when they'll be billed, when the boxes will be delivered, any perks they're going to get. All of that stuff should be clearly laid out so it's really easy to follow. At one point in buster box, we kept adding different things on. Okay, we had perks, we had, uh, gifts we were giving people. We had so many different things going on, okay. And we actually discovered we had so many things going on. We weren't communicating them well to our customers. People were finding it confusing. So we have to go back to the drawing board and strip everything down and simplify it. You should do the same. Your welcome sequence should be laid out in such a simple way a five-year-old child could understand what is going on. Trust me, it will make a big difference.

Speaker 2:

Another way you can help improve that churn rate is make it clear what's coming next and make people excited. So that could be around future teams, future products, whatever and you can communicate that through emails and through the inserts in your box. The great thing about the inserts in your box is they have a 100% open rate. Everybody's going to open the box. Percent open rate, everybody's going to open the box, and I would hope the majority of your customers will read whatever you have on the insert. So that's a great way of building anticipation around what's coming next. Now.

Speaker 2:

Another thing you should definitely consider is right and this is true, and it doesn't matter what kind of business you have or what way you really position it, okay or what customers you get. People are human and people's circumstances change. People may be moving house, they may be going on holidays, they may lose their job, they may get married, whatever. Okay. Lose their job, they may get married, whatever. Okay. You should be understanding to human nature pretty much and you should give people the option to skip, pause or downgrade your subscription. It can make a big difference. Don't put yourself in a position where you force a good customer to continue, or you try to force a good customer to continue and it leaves a bad taste in their mouth and, instead of skipping for a couple of months, you force them to cancel. Okay, understand. Things come up in people's lives. Now that doesn't mean you want somebody completely abusing your system where they take an offer and they keep skipping for months and months on end. That's completely different. But I'm talking about real customers. Good customers give them the opportunity to skip, pause and down, downgrade. So if they're going on holidays, they should be able to skip if they want. If they have lost their job and they're waiting to start somewhere else, you should give them the option to pause. If they are struggling financially or they have too many products because they've been with you for a long time, you should give them the option to downgrade and change to a smaller box. We do it in Buster Box with Buster Box Lite and it does help our retention rate.

Speaker 2:

The next thing milestone gifts at 3, six and twelve months. So this can be a small gift, but it helps people feel appreciated if you give them a really small gift and you make them aware of when the gifts are actually going to come. That can help with retention too. So so, on the onboarding sequence, you can say when you hit three months, we will give you this. When you hit six months, we will give you this. When you hit 12 months, we will give you this. The reason we do this is we really appreciate all of our subscribers and we want to reward you for being a loyal member. Then, a month before the gift is about to go, you can set up an automation to send them an email and just say we just want to confirm you're going to receive this gift next month. You're getting this because you're a wonderful subscriber. The end it makes people feel valued and it makes them feel a bit guilty Around cancelling and there's a likelihood it will lower your churn rate. Okay, this is really important.

Speaker 2:

Churn usually follows the box. You can send out so many good boxes and then something happens and the box you send out isn't a hit. It's a late because there's something outside your control. There's a product in it that people don't like, for whatever reason. There's a product in it that breaks easily. Whatever Churn follows the box massively. Now what I would recommend doing is send out a survey after every single box. Okay, figure out what people thought of certain products and use that data to make your boxes better going forward and to give people what they want going forward, all of this data that you're building up is really really valuable. Valuable and, if used correctly, can make a big difference to your retention rate. It can also make a big difference if you ever get in a position where you're looking to sell your company or whatever, and you have all of this data built up that can be really, really valuable. So do it. Send out a survey after every box.

Speaker 2:

Now, another thing you can do and people absolutely hate this, but we do it pretty regularly in BusterBox is pick up the phone and call your customers. Call people who are set to cancel and figure out why they're set to cancel. And figure out why they're set to cancel and see if you can save them. We do it in BusterBox and it can help. Now, obviously, it can be time consuming To do this, but I personally believe Speaking to your customers Is one of the most valuable things you can do, because you will learn so much From just asking a few questions and in my experience, people are usually more than happy to give you a small bit of their time to give you feedback around the box.

Speaker 2:

The next thing consider turning it into more than a box. Okay, now, the way we do this in BusterBox is when somebody signs up, they get free 24-7 video FET access. Okay, that is really valuable and it nearly makes it worthwhile on its own. Now, for the majority of people listening to this this, you obviously won't have a dog box. But there's other ways you can make it more than a box. You can do a community. If it makes sense, you can do giveaways and raffles.

Speaker 2:

We actually do this with buster box as well. We've done this a few times, where we have run a big giveaway for all of our subscribers and the way to enter is they have to be a member for a certain period of time and then we'll run a giveaway and random subscribers will win prizes, and it's a great way to build engagement and excitement throughout the subscriber base and can definitely help with the churn rate. Now another thing you can do is have a big prize every single month or a random product every single month. That's quite valuable that only one or a few people will win, and every month you pick out some random people and you give them this gift and then you get them to send in pictures of them receiving the gift for social proof and you post it and that's a great way again to build excitement and anticipation and make people feel valued. But it only works if the thing you're giving away is actually something they really want. If it's not something they really want, that that doesn't really work. Um too well.

Speaker 2:

Okay, now there's other things you can do around cancellation, savers and stuff, but we have covered a lot of that on this podcast before, so I won't cover it again today. But look, that's just some fresh ideas that can definitely help you improve your term rate and obviously keep people signed up for longer and make more money in the process. Hope you found the episode helpful. If you did, I would really appreciate it if you could give me a review on spotify or apple or whatever. We'll be back next week at the exact same time as always. If you have a question you want answered on the show, make sure you head over to subscriptionboxresourcescom, join the free facebook group and post your question there. Thanks very much and chat to you next week. Bye.