Understanding Involuntary Churn in Subscription Apps and Strategies to Mitigate
Addressing involuntary churn, while often overlooked, presents a substantial revenue growth opportunity for your subscription app. It’s estimated that 20-40% of subscription customers are lost each year due to involuntary churn. In this article, we give you a quick summary of what involuntary churn is and explore effective strategies to reduce it.
What is Involuntary Churn?
- Expiration: When a subscriber’s credit card expired
- Insufficient funds: When a subscriber’s credit card has insufficient funds
- Lost/Stolen: When a subscriber’s credit card is lost or stolen
- Technical issues: Technical problems with the payment processor
- Billing information: The billing information is out-of-date
Strategies to Reduce Involuntary Churn:
Regular Customer Communication:
Maintaining open lines of communication with customers is vital. Send timely reminders about upcoming subscription renewals, expiring credit cards, or payment failures. Utilize email notifications, in-app messages, or SMS to keep subscribers informed. Automated dunning emails have shown a success rate of 15%.
Grace Periods and Retry Logic:
Implement grace periods to give customers a chance to update their payment information and recover from temporary payment failures. Employ smart retry logic that schedules payment retries at appropriate intervals to maximize successful transactions.
Streamlined Payment Processes:
Simplify the payment process within the app by providing subscribers with information about how they can manage their billing on the platforms, reducing friction and making it easy for customers to update their payment details or resolve issues promptly.
Customer Support and Assistance:
Provide exceptional customer support to assist subscribers facing payment issues. Guide them through the resolution process and ensure a positive user experience.
Analyzing Churn Data:
Regularly analyze churn data to identify patterns and root causes of involuntary churn. Understanding the reasons behind churn enables data-driven decisions and targeted strategies to minimize it effectively.
You may be wondering how you are able to react to billing issues, with all that data sitting with the stores. The App store is providing the ability to access this data via App Store Server Notifications. This requires you to build and manage your own backend. If that does not sound appealing to you, feel free to give Glassfy a try.
Here is how it works:
- Sign up at Glassfy.io (it’s free)
- Install Glassfy Watcher Mode (less than 20 minutes)
- Voila, you’ve got access to all your subscriber event data, such as is_in_billing_retry_period
- To enable dunning emails, easily connect Glassfy to your email provider