Pause Subscriptions to Minimize Voluntary Churn and Maximize Revenue

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Best Practices Churn subscriber retention

Churn-Management-BlogSubscription businesses work hard to provide their subscribers with value. Despite their best efforts, subscribers do cancel, sometimes due to things that are out of the business’ control. For example, perhaps the business is an OTT provider that streams certain sports. Since most sports are seasonal, during the off-season, the subscriber may not use the service and may opt to cancel. Or time and money constraints, or work or travel obligations prevent subscribers from using and enjoying their subscriptions.

Recognizing this reality, Recurly now gives our customers the ability to let their subscribers pause their subscription instead of cancelling, which decreases voluntary churn. Your business keeps the subscriber and avoids the costs of trying to win them back, as well as the effort needed to recreate their account if they do.  

Fixed or "indefinite" pause options

Recurly provides for two different pause options:

Fixed pause scenario: you know the subscriber will resume their subscription because their resume date has been set.

"Indefinite" pause scenario: there is no time set for the subscription to resume. If you want to pause a subscription indefinitely, set a very high value for the number of pause cycles. For example, a subscription with a monthly billing interval could be paused for 1,200 cycles, which equates to 100 years.

For indefinite pauses, be sure to nurture these subscribers to encourage them to come back. You might email them to let them know about new offerings or plans that might better meet their needs. Utilizing Recurly’s coupon tool is also a way to entice subscribers to reactivate.

We also automated resuming the subscription when a subscriber responds to a promotion. For example, a subscription business offers a coupon to use on an upgraded plan if the subscriber will resume their service. If the subscriber redeems the coupon, Recurly resumes the subscription and issues an invoice.

In either fixed or indefinite pause scenarios, you have the option to resume subscriptions  manually before the end of the pause term, at the subscriber’s request.

Streamlined billing

When subscribers request to pause their subscription, the subscription remains active until they reach the end of their current billing period, at which point the subscription will move into a paused state. Since most subscriptions are paid in advance, this allows the subscriber to use the service that they’ve already paid for. And your accounting or finance department doesn’t have to worry about prorating refunds, issuing credits for unused periods of time, or other billing complexities that result from mid-cycle changes.

Why pausing is preferable

From the point of view of your business, retaining current subscribers is far less expensive than gaining new ones, or in this case winning back those who have cancelled. But if a subscriber’s only option is to cancel their subscription, your business must expend marketing and other resources to win them back. And once they do, you have to recreate their account and payment method, which takes up operational resources.

For the subscriber, they lose out on all their activity and billing history. They also lose things like their assiduously curated queue of things to watch on their subscription OTT service, or the account preferences they had painstakingly set up, perhaps for their curated box of the month.  

Rather than spending money on the hopes that a churned customer will return, offer your subscribers the option to pause their subscription instead.

Optimize for your business

Some more things to consider as you implement this option:

  • Will you limit how long and how often subscribers are able to pause their subscription?
  • Will you set a minimum amount of time that the subscription must be paused before the subscriber can return?
  • Will you charge a reactivation or other fee to resume the subscription?

These decisions will differ depending on a business’ subscriber base and the particulars of its operations.

Provide value, reduce churn

Recurly understands the challenges subscription businesses face in reducing voluntary churn. By allowing subscribers to pause their subscription when needed, they are less likely to cancel. You get to continue your relationship with the subscriber, and subscribers appreciate your efforts to accommodate their needs and provide enduring value.

 

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