Stop the endless tail-chasing and cycling through subscription clients. Learn strategies to retain your customers and reduce churn in service subscription business models.

If you run a subscription business, you know exactly what “churn” is without needing much explanation. What a perfect word as well. It properly conveys what the phrase “client retention strategies” cannot. Churning is a restless pattern that does not go anywhere. Though the output may be a wonderful thing in the end, how much you start with is how much you get out, no matter how hard you work. The volume does not increase on its own, and that’s the challenge many small business owners face in hitting their growth goals.

Our definition for churn is the endless cycle for owners of seeing customers come in, but an equal, or slightly greater / lesser amount leaving too. The problem is obvious: without a foundational base of customers staying on with your service, you cannot expect to grow, and new business just holds the line. You can only replace what you are losing, and you stay stuck in place.

This is the exact reason it becomes so important to keep the customers you have. To grow, client retention has to become equally as important as acquiring new clients. Otherwise, the math will not be mathing in your favor.

Enter the strategies to reduce churn in service subscription business –

There are a million tips out there. Some are ground-breaking, and others, not so much. From my own personal experience running a subscription service music school that provided in home lessons for almost 2 decades, I’ve found a few universal core techniques that worked for me and allowed our school to go through periods of extreme growth. Of course, at some point, recalibration and infrastructure development are needed too, as you must be able to serve your growing base adequately.

But if you are looking for strategies to welcome the acceleration for your company, here are some tips that really worked for us with subscription cancellation prevention:

Client Retention Strategies

STRATEGY 1: Create obvious, positive results for your clients.

If you are performing a service as a subscription, it must provide some benefit to your client. You, or the providers of your service, must aim to create that feeling of benefit at all times. By dropping the ball on the results and desired outcome, the quality of your product will suffer, and you’ll have a number of clients always exiting. In a subscription service business, what you DO for your clients matters most of all. Deliver what you promised and get results.

STRATEGY 2: Create milestones to celebrate the relationship, or progress for the client.

This varies by industry and type of service you offer, but any time you create a moment to celebrate what the service is providing to your client, you generate success and loyalty from your base.

If you are in a personal development, or educational field where your clients are working with you to see results within themselves (or a student), create achievement milestones, performances, showcases, certificates programs, and other ways to recognize progress within your clientele. Some could be public events, or it could be a private recognition during sessions.
If you are in a service-based business where the work performed serves an immediate need – like landscaping, dry-cleaning drop-off service, or other recurring work for your client, develop ways to incentivize their tenure with your business. Extend “thank you” discounts on birthdays, for being a patron for x number of years, etc. Provide discount-based rewards for referring friends, and recognize your ‘legacy clients’ who have referred, or spent the most with you by extending unique customer-appreciation gifts.

STRATEGY 3: Track your sign-up and exit numbers every day, like a hawk!

Okay, “like a hawk” may be a little much, but I cannot under-state the importance of this one. You MUST stay on these two KPIs (sign ups and exits), because your whole business really does depend on it. The other metrics matter too, but without these two being synchronized and netting positive consistently over short periods of time, your business will keep churning, or start shrinking.

Too often, owners and the visionaries of a company get caught up in ideas and the “what’s next” of growth strategy without realizing there is a metaphorical leak in the boat. Leaks are small too – very easy to miss if you are not looking closely. Over-time, though, any small bleeds will add up and still lead you to the losing side with your bottom line.

So be very vigilant on a daily basis about how much incoming and outgoing is happening. If you can zero in on preventing and / or lowering the number of outgoing customers you have and pay close attention to this group, you can turn this trend around. You will only catch this insight if you are looking, though. Look closely.

Note: The pace of incoming to outgoing can be measured over a day, a few days, or a week. This depends on your specific scenario. I recommend sticking to small metrics and time-intervals based on the pace of business you do. In a music school, we tracked this every day, but did a weekly tally. For your company, it could be a monthly metric if you sell large solutions, or every three days if you do a high volume of smaller subscription sales. Find the metric that gives you the clearest window into the behavior of your customer and why they are leaving.

STRATEGY 4: Optimize your internal team’s performance.

So much of the service received by our clients depends on our teams, unless you are a solo-preneur. If you are the latter, your personal growth as a professional and leader is a priority, and seeking an executive coach, mentor, or even a therapist, can do wonders for your career growth.

For organizations with a staff of service providers who work with clients, developing your team as professionals is a major key to success. To be the best, your team must be the best. The internal work you do to teach core values will directly contribute to success and client retention, as your staff is the face of your organization. As leaders, we teach our teams how to provide the best level of service to our clients and how this benefits them as professionals.

Ultimately, if poor service is going out, no amount of pleasant interaction with you, or your office team is going to save all your exiting clients. Good operations just lessen the blow-back when a client inevitably stops with your service.

Lastly, there is another important internal component to optimizing your team’s performance. In addition to teaching, you must also invest in their career growth. Feeling supported will empower your team to do their best, and this positive energy from within will lead to a cycle of success for clients. Your team feels your genuine emotion towards them, whether you realize it or not as a leader. Get into a spirit of authentically caring about your internal group, and the ripple-effect will be better than you could have imagined.

STRATEGY 5: You MUST have a re-marketing strategy as part of off-boarding for clients.

Within your company’s systems for processing client exits, you must make an effort to “save quits”, or encourage them to stay when they contact you to do the opposite. This is not being pushy when done well and when listening to the cues the customer is giving you, though it can be executed poorly too. Instead, the effort to keep a client who wants to stop your service is simply an effort to convey their importance to you. This must be genuine to be effective.

When I called a certain major clothing subscription company to end my monthly service, I was asked no short of five times to take a promotion to continue on with the regular deliveries, uninterrupted. Though that is a bit much for a single call, I have to give it to them…they have the right idea on re-marketing!

Re-marketing is simply giving your customer a way to continue on with your service by resolving the concern leading them to stop.

When I ran a music school, we always made it a point to ask our families how their lessons were going and why they were stopping at that time. We either asked for more information as a response, or we immediately presented other ways for them to continue taking lessons.

Though it didn’t work every time, it worked a lot. 15 – 20% of students who wanted to quit would continue on, and in a year, that could be a sizeable number of recurring clients who did not leave our program. They set a foundation that other sign-ups could be built upon.

Those who said ‘no’ often returned at a later date too. The best part is that no one in our community felt this re-marketing effort was pushy, or too much. Our families appreciated the level of care we put into their experience, and these efforts to learn about our community established our brand as very attentive, warm, and a pleasure to work with throughout the D.C. Metro Area.

Reducing your subscription churn – in conclusion

In order for your business to grow, you have to stop the bleed of clients. If you are spinning your wheels with your subscription-based service business, adding a few key systems to better monitor your sign-up and exit stats, developing your internal team (or yourself as a leader), and taking deliberate actions to show your level of care for your clients will lead to lasting success.

Remember that the most effective services are authentic, transparent, and most importantly, they care. If you are looking for ways to improve your subscription service, or recurring revenue model, business to the next level and stop the churn of clients, we would love to help! Learn about our virtual business and leadership coaching sessions and contact us for scheduling and pricing info.