Chapter 3: Retention - This chapter gives practical examples showing how a subscription marketer can use products and pricing as effective tools to retain existing paying subscribers.
A retention campaign is a marketing strategy designed to retain existing subscribers. This is usually achieved through discounts, incentives or a bundle as well as special messaging which highlights the value of the subscription.
Typically a retention campaign is run over private channels, ie a website requiring log-ins, email promotions or customer service teams. The pricing may be public but is generally private, and can even be personalised to account for an individual subscriber situation and to maximise its customer lifetime value (CLV).
Great price + great product + great service = retained subscriber
While this guide demonstrates how the right pricing can make a difference in churn scenarios, it's also worth mentioning that retention requires two other key elements: great product and customer service.
So before commencing any retention campaign, it’s important to ensure you understand how engaged a customer is with the product and whether they have raised complaints in the service. The best discount, incentive, or messaging will only go to waste on customers who are disgruntled with the product or service.
To retain, you must segment
Before running retention campaigns, it is useful to know whether someone is a risk of churn. There are a couple of straightforward ways to determine this.
- The simplest method to discover whether someone is a risk of churn is to know when they either log onto your website or call your customer service teams to cancel their subscription.
- Subscribers on a fixed-term trial or discount offers (get first month free or pay 50% less the first six months) are also likely candidates to churn, as you can safely assume that many customers who are reaching the end of their fixed-term periods are likely go price-shopping.
- Yearly subscriptions, which are typically one-time high costs, can also give subscribers an opportunity to evaluate whether they are receiving value for money.
More sophisticated companies will build a predictive ‘likelihood to churn’ score for subscribers. This is based on certain criteria, ie engagement with the product and frequency of use. They will then compare this to the 'customer lifetime value' (CLV), to assess whether a retention effort is worthwhile.
Retention and Limio
To successfully retain a customer you need to personalise your retention pricing. This requires a significant amount of both customer data and offer data. Limio Catalog can help you manage granular customer segments, define special personalised retention offers across the subscriber lifecycle and track whether your retention campaigns are effective.