11 Reasons Your Monthly Recurring Revenue Doesnt Grow and What You Can Do About It

How many times have you had a great month of recruiting new subscribers, only to see an increase in cancellations a couple of months

Source: Bigstock

How many times have you had a great month of recruiting new subscribers, only to see an increase in cancellations a couple of months later? Or worse, too many new subscribers take advantage of your refund policy? Month after month, members come and members quit. I understand the frustration of months and years of hard work with little growth to show for it. It’s not your fault.

You work hard to get your new subscriber members. You invest a lot of time, money and energy into moving new members through the door. But all that work is for nothing if a member cancels his membership within 3 or 4 months, or worse, requests a refund within 30 days. In membership and subscriptions, money, security, and growth come from retention.

Although subscriptions and memberships have recently become more popular in the for-profit world, nonprofits have been using them for centuries. Associations, clubs, and charities grow their membership each year using a set of rudimentary, almost archaic strategies that, until now, have been invisible to today’s subscription membership builders.

Here’s a list of the most common subscription maladies and the simple secret “tonics” I use to cure them:

1. No scalable paid marketing channels

Your program isn’t going to grow unless you are attracting a steady flow of new members. The only dependable way to ensure you generate a continuous series of new member opportunities is though paid marketing channels. Yes, you should implement a member referral campaign as well as social media support, public relations and a whole host of other strategies to generate traffic to your website. But in the end, your membership will scale only if you have paid marketing channels. Direct mail, display advertising, and pay-per-click advertising add new prospects to your marketing funnel. Your membership’s rate of growth will be directly proportional to the number of new leads you are generating through your paid marketing channels. This is the single most important step, and it’s where I start with all of my start-up subscription program clients.

2. No transformational offer

Your prospective member didn’t wake up today hoping to receive your newest monthly package. He’s not refreshing his email, hoping someone will send him another message. No, he’s already overwhelmed. Promising to send him your products or giving him access to an online library of articles to read or videos to watch is not compelling. When clients come to me to help them stop their members from quitting, I’m often able to help them improve their sales conversion by creating transformational offers. These offers promise to immediately solve a problem in their prospective members’ lives.

If you get your members excited about solving an important problem, and then tell them later you are going to drip out the solution in monthly installments, that isn’t a compelling offer. Instead, we position quick wins in the new member welcome sequence as a benefit to the member (although we created it to benefit the membership program by stopping members from quitting).

3. No easy win for new members

There’s a new study out showing that the average Netflix user watches more than 20 minutes’ worth of trailers before choosing a movie. They could have been 25% of the way through the movie if they’d just started watching right away. But before investing 90 minutes into a movie, they want to know within 90 seconds if the show is something they’ll like.

With today’s members, you’ve got 90 seconds to impress them and also to impress upon them how they can benefit from engaging in your program. You’d better put your best, most engaging benefits at the beginning of your membership program because your perspective members aren’t going to invest a lot of time into trying to figure out where the benefits are.

4. No new member orientation

It’s a lot easier to motivate someone to buy than it is to get her to take action. You must continue to sell even after she joins. Your new member welcome must establish trust by delivering what you promised in your sales presentation. You must help your new member believe that this program is for her. Introduce her to your team, provide her with tools to resell her spouse and/or members of her team on your program and show her where to start to get the fastest results. Include any natural up-sells.

5. No engagement loops

I sometimes try to have one-way conversations with my wife. This is where I do all the talking, she listens patiently to everything I have to say and then she does exactly what I prescribe for her to do. Shockingly, this doesn’t work. In fact, it always fails miserably.

If you are sending your members videos, newsletters, emails and/or audio in a one-way conversation, why would you expect it to work any better? Give your members an opportunity to submit materials for review or to post materials on a community message board for feedback. Run contests that promote engagement. Invite them to snap photos with your materials to post on social media. If your membership materials are consumed online, you can automate a lot of this. Give them certificates, congratulations, and online badges when they complete training modules. And follow up with them if you notice they haven’t logged in within a certain number of days.

You can ship the best materials in the world, but if your member doesn’t consume them, he’s quitting your membership. Give your members encouragement, feedback and excitement by giving them recognition along the way.

6. No member connection

As your members implement your ideas and get results, they are going to feel really good about their progress. Soon enough, your member is going to feel so good, he’ll think he doesn’t need you anymore.

I went through this with swimming. When I started lessons, I was drinking more water than I could paddle through. Within a few sessions, I’d improved to where I had a nice stroke. I decided I could stop the lessons because I was so much better, although I’d only progressed from an F to a D as a swimmer. But to me, the needs of everyone just starting out were so basic, and I felt like those lessons were now beneath me. I didn’t have a reason to stay.

You must connect your members to create a sense of community. In some cases, you can have them messaging back and forth. In other situations, that’s not practical, so you connect them by sharing breakthrough member stories. Keep sharing stories from your most successful members so your other members can keep growing and working to become a future success story.

7. No way to give back

Your members get really excited when they start to master your program and get results. They want to engage and contribute to the community. You’ll often hear them say they want to give back. Allow your members to teach, share their stories and co-host a coaching call so other members can ask them questions. Advanced members love these opportunities, as the teacher almost always learns more than the student.

8. No one responsible for retention

Who on your team is responsible for retaining and renewing subscribers? Who owns that KPI (key performance indicator)? I’ve worked with several clients who have marketing managers who own lead flow, sales managers in charge of new members, customer service managers in charge of closing tickets and an editorial team in charge of producing publications or other benefits on a timely basis. But few have had someone in charge of retention. Why is that? Retention is the key factor in determining your member value. At $99.00 a month, if you keep your member for five months, that’s a member value of $495.00. If a retention manager figures out how to double retention to 10 months, every new member is worth $90.00. It is the single fastest way to double your monthly recurring revenue.

Source: Bigstock

0)]9. No one minimizing involuntary churn

It doesn’t matter what you charge-it’s all about the money you collect. Lots of problems can arise when you’re trying to collect payment: failed cards, expired cards, lost cards, new cards with a chip to replace the ones without one. Sometimes there is no explainable reason whatsoever; the credit card company just declines the charge, even when you have permission from the cardholder to charge an ongoing subscription. You can minimize these problems. Implement simple systems that allow consumers to conveniently update their card information, use merchant services providers that specialize in monthly subscriptions and consider services that automatically update credit card numbers when cardholders get an updated card.

Source: Bigstock

2)]10. No churn metrics

You’d never believe how many people come to me for help who can’t tell me key metrics such as their churn rates, average member lifetime or the common point at which most members quit. Preparing these reports is often the first thing my team must do before I’m able to diagnose what’s going on. These reports are like the results of a blood test-there’s a bunch of numbers that flag when they are out of line, enabling you to diagnose where problems are hiding. I’ve stopped several clients from overhauling their entire program after pulling reports and discovering that over half their membership was made up of long-term, satisfied members. Their growth problem was stemming from a high churn rate with new members, which we were able to fix with an improved onboarding system. My team creates complete metrics reports weekly for all of my clients’ membership programs.

Source: Bigstock

3)]11. No member benefits

It’s come up a couple of times recently where members diligently implement the program, yet don’t experience any positive results. It’s just a fact that the subscription delivers a program that doesn’t work or has little value to subscribers. The membership program doesn’t work as promised. I’ve turned away a number of clients over the years who were selling programs and products that didn’t work. For those who are willing to seek a solution, I prescribe testing with willing subjects who are fully aware of the problem to identify the benefits my clients can deliver that will provide tremendous value to their members.

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