Reduce Churn is an automated retention tool designed to help you retain subscribers who attempt to cancel their subscriptions. This comprehensive guide covers everything you need to know about churn, how to set up the Reduce Churn feature, and best practices for maximizing its effectiveness.
ℹ️ INFO: The highest percentage of cancellations typically occurs in the first month. For some industries, the average subscriber lifetime is just three months. Encouraging annual subscriptions (even with a discount) can significantly improve your overall retention.
What is Churn and Why is it Important?
Churn is the number of subscribers you lose each month divided by the number of users you have. For example, if you have 100 subscribers and 5 cancel, your churn rate is 5%.
Reducing churn is crucial for several reasons:
It prevents revenue loss from canceled subscriptions
It's 5x more cost-effective to retain existing customers than acquire new ones
Reducing churn by just 5% can increase profit by 25-125%
Every retained subscriber continues to generate recurring revenue
📝 NOTE: Churn rates vary significantly depending on your industry and audience engagement.
Generally, rates range from 2% for high engagement audiences to 6% for medium engagement, and up to 11% for lower engagement.
Automated Workflow
The Reduce Churn feature works automatically for all cancellations once set up. It has three main components.
Cancellation Survey
When a user attempts to cancel their subscription, they'll see a simple survey asking why they want to cancel.
Immediate Discount Offer
After completing the survey, they'll immediately be offered a discount on their next and succeeding payments, depending on the duration set for the automation.
If they accept this offer, the cancellation is prevented, and they continue their subscription with the discount applied to their next billing cycle.
First Win-Back Email
If the user completes the cancellation without accepting the discount, they'll receive an automated win-back email immediately. This email offers the same discount as a second chance to stay subscribed.
💡 TIP: For monthly subscriptions, we recommend offering a 75% discount for the next month. For yearly subscriptions, a 15% discount is typically effective.
Second win-back email
On the final day of their active subscription (right before it would be revoked), members receive a Final "Last Chance" email with the same discount offer. This creates urgency and gives them one final opportunity to continue their subscription at a reduced rate.
📝 NOTE: To prevent promotional exploitation, the Reduce Churn automation will not be triggered if a user is on a trial period or has used a coupon to purchase a subscription plan.
Set Up the Automation
You can enable Reduce Churn automations for each subscription plan you offer:
Navigate Marketing
Select Reduce Churn
Click New Automation
Choose the specific Subscription
Set your discount amount (percentage)
Customize the email sequence
Click Save
Select Activate Automation
💡 TIP: You can create a Reduce Churn automation for each subscription.
Track the Performance
You can monitor how your Reduce Churn automations are performing:
Navigate to Analytics > Marketing
Select Reduce Churn
View the Metrics
📝 NOTE: Analytics data is updated daily, not in real-time. Check back the following day to see the most recent data.
Cancellation Requests | Members who canceled and went through the automation |
Saved Members | Members who accepted the offer instead of canceling |
Conversion Rate | Calculated as Saved Members / Cancellation Requests |
Revenue Saved | Total revenue from Reduce Churn saves |
Conversion over time | Members who went through the Reduce Churn automation and the percentage of them who accepted the offer |
Conversion Rate | Calculated as Saved Members / Cancellation Requests |
Cancellation Reasons | Cancellation survey answers from members who requested to cancel their membership |
FAQs
How long is the Reduce Churn discount valid?
How long is the Reduce Churn discount valid?
The discount is valid until the day before the next invoice is charged. If a user cancels close to their subscription end date, they may only receive the second email.
Will the discount be applied immediately?
Will the discount be applied immediately?
No, the discount will be applied to the next billing cycle, not the current one.
Can I customize the cancellation reasons in the survey?
Can I customize the cancellation reasons in the survey?
Currently, you cannot customize the cancellation reasons in the survey or add an open text field for custom feedback. The current survey provides the 'Other' option to allow users to enter a custom reason for cancellation.
Does Reduce Churn work on mobile and TV apps?
Does Reduce Churn work on mobile and TV apps?
The Reduce Churn feature is only available on the web platform, not on OTT subscriptions or mobile/TV apps.
Can users get multiple Reduce Churn discounts?
Can users get multiple Reduce Churn discounts?
No, the system includes safeguards to prevent promotional abuse. The Reduce Churn automation will only be triggered once per user per store.