7 Effective Ways to Reduce Subscription Cancellation Rates

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Subscription businesses are among the most profitable and sustainable opportunities online. There will inevitably be some churn as customers cancel at various points, but consistent recurring income can help build a thriving business. Most enterprises of this kind require that customers remain subscribed for a certain period to ensure profitability.

If too many customers cancel, it can be hard to cover costs. Keeping customers happy is obviously part of a subscription business, but small reductions in cancellation rates can make the difference between profit and loss. Each of these seven methods is used by subscription businesses to reduce their cancellation rates considerably.

Build a Community

When customers feel part of a community, canceling an account becomes harder. With the use of forums and groups, people get used to the social aspect of the community, often getting to converse with like-minded people involved in the same niche.

Running any community group does take additional effort, but you can help to increase satisfaction levels and potentially reduce customer service requests.

Study User Behavior

If you can preemptively react to a possible cancellation, you stand a better chance of saving the customer than after the request has been made. While you can never be certain someone will cancel, there are common patterns that users follow.

An average customer could, for example, stop using your product or service for a certain time before making the decision to cancel. If you can spot common patterns and automate the process, you can work to make them active participants by addressing the issues early.

Make Clear What is Being Lost

Making clear what a customer will lose can often be enough to stop a cancellation. In some cases, canceling might lead to a loss of data, removal from a private forum or Facebook group, and blocked access to a certain part of your service.

When a customer is faced with the reality of the loss, they might be reluctant to immediately move forward with the cancellation.

Provide Different Pricing Tiers

Price will be a common reason for a cancellation, but the customer might ideally still like to remain a customer. Creating various pricing tiers means you could offer a lower tier instead of closing the account.

A lower-tier won’t have all the same elements of the more expensive service, but it could be the difference when a customer is considering their options.

Offer a Discount

Consumers like deals, so a discount could create enough of an incentive for someone unwilling to pay full price. It is worth being cautious with discounts as you could upset customers paying the higher fee, but presenting it as a loyalty bonus can avoid the sense you are devaluing your product.

A discount could be for a free month, a set period of time before reverting to the normal price, or a permanently discounted cost.

Give a Consulting Session

A common reason for cancellation is that a user doesn’t fully understand how to use the product. They may have an idea of what is on offer but could be missing certain factors that let them get the most value.

While providing training videos and guides will be useful for most, some users might benefit from a short consulting session. Before offering such a service, it is important to determine whether the financial benefits make sense due to the additional time any consulting will take.

Put Accounts on Hold

Some users are only looking for a temporary break from the service, whether for financial reasons or a lack of use. Giving the option to put an account on hold can prevent cancellations by keeping the account details and payment method in place.

Having to start from the beginning involves making a new buying decision, whereas a temporary hold will involve minimal action from the user. Temporary holds can be offered explicitly in the account section or as a last resort when a cancellation request is made.

It will be impossible to completely eradicate cancellations, but fine margins can make all the difference to your business. Reducing cancellation rates, along with effective customer acquisition techniques, can give you the freedom to reinvest profits back into the business.

It will require testing to find the methods that work with your customers, but focusing on preventing cancellations is a factor that should not be overlooked in a well-managed subscription business.


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