Ruff Times Before Recurly: How PupBox Fought Churn with Pricing Flexibility

PupBox — like many of its puppy customers — was facing growing pains.

No, there wasn’t any shortage of adorable consumers: the subscription box for puppies (and their human owners) has been a hit since 2013. 

But PupBox did face high churn rates due to its inability to offer subscribers an incentive to sign up for longer-term plans.

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Subscriber Retention and Understanding Involuntary vs. Voluntary Churn

The Importance of Churn

Every e-commerce site should be aware of the importance of churn, and how devastating it can be on a business. Measuring and reducing churn is paramount to successfully scaling your company. While reducing churn is easier said than done, there are standard measures you can take to help reduce it. Fundamentally, churn boils down to your product - how sticky it is and how robust your offering is compared to others in the space. It also has to do with your industry. Some segments, like box of the month, experience higher churn 10.54% than SaaS, which hovers around 4.79%.  

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Managing Subscriber Churn During The Downturn

The disruptive force of the COVID-19 pandemic generated 17 million U.S. unemployment claims by mid-April, with the unemployment rate hovering near 15 percent — the highest since WWII. Record-setting workforce displacement and sluggish government response has left tens of millions of people virtually without funds and having to decide between wants and needs.

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How Pausing & Postponing Subscriptions Can Retain Subscribers in Uncertain Times

COVID-19 has penetrated nearly every aspect of our lives and there is no precedence or template for how to respond to this ever-changing situation. Consumers are challenged with layoffs, shelter in place and quarantine orders, plus struggling with how to work from home while juggling the needs of their daily lives.

Showing empathy and providing flexible access to your products and services is critical right now. 

In this post, we’ll provide two highly effective options to help retain subscribers in these uncertain times: pause a subscription and postpone a subscription.

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The Benefits of Bundling for Your Subscription Business

Subscriber retention is a cornerstone of successful subscription commerce, and one of the best ways to retain loyal subscribers is to ensure that your subscription delivers value. Because many subscriptions allow subscribers the convenience to set it and forget it, your subscription business might not always be top-of-mind. That’s one of the many reasons why it’s easy for subscribers to "peace out" and churn when they feel like they aren’t getting the value they desire from your product or service. 

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Why Pausing a Subscription Can Be a Powerful Retention Tactic

There comes a time when a subscriber may consider canceling a subscription. In fact, nearly 40% of subscribers of any service type​ cancel. More than a third cancel in less than three months, and over half cancel within six, according to a study by McKinsey and Co. So, how can you get subscribers to stick around? Instead of allowing subscribers to churn, you can retain them by enabling them to pause their subscription. 

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Recurly’s Promotional Toolkit Supports Subscriber Acquisition and Retention

Subscription businesses, like any other business, need to continually attract new customers—and of course, keep their existing customers happy. When businesses exceed all expectations, they may find themselves lauded in the trade press over these results, as AMC Theaters and Spotify were recently. AMC’s Stubs A-List movie ticket subscription service reported signing up over 900,000 subscribers last quarter, just 100,000 short of its one-year goal. Spotify reported reaching 108 million premium subscribers in Q2, representing a 31% increase year-over-year. 

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New Recurly Research Examines Subscriber Retention

As an objective measure of business performance, benchmark data is an invaluable resource on which businesses rely to help them make better-informed decisions. With a wide range of customers in multiple industries using Recurly, we have unique access to comprehensive data and metrics, which subscription businesses can use to make those critical decisions.

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Pause Subscriptions to Minimize Voluntary Churn and Maximize Revenue

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Best Practices Churn subscriber retention

Subscription 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.

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Minimize Churn, Maximize Revenue: a New E-Book From Recurly

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Churn ebook subscriber retention

Churn is a key metric in subscription commerce, tracked closely by the most specialized Box of the Month businesses to multi-million-dollar enterprise SaaS companies. This is because even slight differences in churn rates can have a significant impact on revenue growth.

Understanding how to minimize churn and increase subscriber retention is a key focus for successful subscription commerce companies. It’s a significant area of focus for Recurly, too, as we are continually working to develop new technology to reduce churn. We also want to make sure we are sharing our expertise, and our newest e-book discusses key considerations in managing churn and retaining subscribers.

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