Addressing churn rate is always the most important first step when I start working with a new subscription client. Most clients think they understand this already. When I speak with them for the first time, they usually tell me “this is handled,” so we can move on. But once we invest a bit of time digging in with them and their team, we discover that they can reduce subscriber churn rates with one simple change.
Don’t feel bad if you’ve been doing this wrong. When people tell you how the subscription economy or the membership economy is such a terrific industry, they never mention one crucial detail. I usually find it’s because few truly understand it.
The biggest mistake subscription businesses make is using the transactional business model.
The transactional model is essentially, “I’ll send you three issues,” or “I’ll send you three boxes for the price of two,” or “get these free bonus items for free when you join the subscription.” While these offers are sometimes enticing, they lead to high subscriber churn. The problem? Your subscribers don’t want more stuff.
How many of your prospective subscribers woke up today thinking, “Wow, I hope today is the day I get an email!” Or, “I wish I had more to read.” Or, “I need some more stuff around here; my home and office are almost empty.” No, your potential subscriber doesn’t need more stuff; she’s already overwhelmed by what she has.
As marketers, we often dress up the transactional model with smart marketing strategies. Perhaps you show that everyone else is buying your subscription to demonstrate social proof, you inject scarcity by making your offer available for only a limited time, or you generate reciprocity by giving subscribers so much for free that they want to buy from you to give back. All smart strategies, but not one of them is as powerful as transformational marketing.
How do you create enduring excitement for your subscription? Instead of the transactional model, use the transformational. Think about weight loss, for example. Weight loss companies have this down to a science. They use before and after photos and videos to show the transformation that members can expect from using their weight loss products and programs.
The recycling movement also uses the transformational model. When you drop that trash into a recycle bin, you transform yourself from a wasteful, over consuming environmental terrorist into someone who cares about the environment.
Think about your products and services. What is the transformation that you give to your members and subscribers? How do they feel about themselves now, and how will they feel after they subscribe to your program? What will they be able to do better? How are you going to create a difference in their life?
If you are a financial publisher, you want to help your subscribers make money, but it goes beyond that. It’s also about making them feel like they are providing well for their family.
If you provide a subscription box to dog owners, focus on the closer relationship they will have with their pet rather than on the actual items in the kit.
If it’s a subscription for parents or grandparents, describe the unique experience they will have with their loved one when they use your products so they can transform themselves into parents or grandparents who care about that special child’s future.
While this may appear to be a subtle change, it makes all the difference in the world. In fact, it’s one of the biggest reasons why clients who hire me to reduce their subscriber churn discover that what I do for them helps them to increase new subscriber rates as well. Transformations create communities. Moving from an outsider to an insider is a huge emotional shift. For example, a box that is curated to transform your subscriber into one of the coolest new fashionistas in her peer group changes the way she feels about herself.
Transformation marketing makes subscribers want to share, refer you to their friends, and renew. It’s the single most overlooked retention tool in the subscription economy.
Promote the transformation, and you will see your churn numbers go down and your retention rates go up.