As consumer goods and “box of the month” programs have seen customer acquisition rates mature while churn rates have plateaued at between 7.5 percent to 10.5 percent, according to Recurly Research, companies are now prioritizing customer retention.
In a survey of 435 subscription companies, Brightback noted that there are “new indications that the industry attitude toward customer retention is changing — 93 percent of professionals say customer retention is just as or more important than acquisition.”
But despite the change in sentiment, researchers at Brightback said “there’s still no clear owner” within the company charged leading retention efforts. This can hamper execution and blur accountability, and therefore, effectiveness of retaining subscribers.
Brightback said the research also revealed differences in how companies set priorities, and use metrics and deploy tactics. “While these differences exist, the industry as a whole is moving toward running a retention-minded business, one that’s committed to driving more revenue while actively reducing customer churn,” authors of the report said.
Key findings of the report include optimism over satisfying customers. “A whopping 96 percent of respondents say customers cancel for reasons that could be managed or fixed,” the report stated.
The survey also showed that companies are innovating “in customer loyalty and retention programs, while looking to learn new insights from customer data.” Brightback noted that most companies are “looking to allocate resources to customer loyalty and membership programs, automated workflows and new engagement channels.”
The poll also found that many subscribers can be retained — even at the last moment. Authors of the report said 43 percent of respondents “save 6 to 25 percent of customers at the point of cancel” and said the point of cancel “presents a big opportunity for companies to retain subscribers.”
Lastly, 96 percent of subscription businesses “believe that customers cancel for the wrong reasons, yet a lack of tools and best practices hold them back from doing more.” The authors of the report said problems with “workflow, engagement and timing are major challenges in reducing customer churn.”