How to make the most of the cancellation journey
Customers canceling subscriptions are among the lesser desired situations for any subscription business. Contrary to what it may sound, providing an excellent cancellation experience fuels strong subscriber retention outcomes.
This article covers why cancellation journeys are crucial in subscription models, along with some best practices for a stellar cancellation journey.
Why does the cancellation journey matter?
In subscriptions, there will be some subscriber churn. A customer's decision to cancel their subscription may come if they feel they're no longer getting value from your service at the existing price point. Alternately, they may find a competitor offering a more compelling choice and switch their boats.
In either of the above two situations, trapping the customer and tricking them into staying subscribed using dark patterns is a grave mistake. For instance, this may include malpractices like putting customers through lengthy surveys before they can cancel, requiring them to send multiple emails to different places to withdraw, or flashing big buttons that prompt them to stay with microscopic cancellation links that are hard to find.
Annoying customers in this manner adversely impacts their overall experience with your brand. Not to mention you ruin your reputation at your last touchpoint with them, regardless if you've delivered a great customer experience throughout. The final awful experience costs significantly in terms of a lost opportunity to win them back and further increases new subscriber acquisition costs for the future.
Long story short–the customer experience is vital.
American Express suggests that 33% of customers would consider switching companies due to one poor customer experience.
A positive customer experience inspires 62% of customers to make repeat purchases.
A PWC report outlines that customer experiences allow companies to charge almost a 16% price premium on their products or services. 65% of customers suggest that they find positive experiences more influential than great advertising.
96% of unhappy customers don't complain directly to the company when encountering a bad experience. However, they express their bad experience to about nine to fifteen people. This negative word of mouth adversely impacts future customer acquisition.
You may understand how leaving them with a bad experience can cost your business.
As a result of negative experiences from a deceptive, convoluted cancellation journey, a popular app recently settled a lawsuit for $62 million. Therefore, paying attention to cancellation flows is critical.
Best practices for an excellent cancellation journey
A great cancellation path is simple and almost as easy as signing up for a user. It empowers, educates, and inspires a customer instead of tricking them into staying using obnoxious malpractices.
Some best practices to include in your cancellation funnel once a customer raises a request include:
1. Empowering subscribers with clear cancellation choices
This implies being transparent and trustworthy while giving customers complete control over the cancellation process. In other words, ensuring that the cancellation option is visible and accessible, clearly explaining how to cancel, and outlining the next steps regarding refunds or any charges you may debit. Companies like Netflix and Basecamp do a great job with such cancellation transparency.
In case of any customer questions at this stage, providing them with prompt support through call centers or live chats is also very helpful. An excellent way to ensure that is by using subscription management and billing platforms with meaningful CRM integrations like Recurly for Support Zendesk to elevate the customer experience during support.
2. Providing the flexibility to pause or downgrade
Sometimes, customers may want to cancel because they do not need your services for a while or are trying to curtail their spending costs. In such cases, offering a softer alternative of pausing instead of canceling can be helpful.
The best cancellation journeys incorporate the flexibility to pause or downgrade instead of canceling immediately. In fact, customers using Recurly's pause feature in their cancellation flow have reported achieving a 46% reactivation rate after a pause.
3. Inspiring them to change their mind
If a user expresses an interest in canceling, it's productive if you consider it as an opportunity to inspire them to change their mind. To start, ask them if they’re sure they want to cancel in a simple popup or page. Additionally, it's helpful to reiterate the value proposition of your offering and what they'll miss by hitting the cancel button.
However, it's best not to prey on the fear of missing out by flashing unpleasant buttons like "I don't want to save money," "I want to see ads," and so on. Customers today are way beyond falling for such stale messaging tactics.
How to win back customers on the verge of canceling
If a customer wants to cancel their subscription, how can you change their mind? Well, the answer is most definitely yes. Here are some potent ideas to turn this situation around:
When the customer chooses to pause
In this period, it's helpful to engage with such customers frequently yet meaningfully to keep their interest alive. Doing so doesn't imply spamming them with dull newsletters or social media outreach. Instead, it means providing a mix of helpful information and effective sales outreach.
A great way to stay in touch can be by requesting short feedback surveys and encouraging customers to contact support for any help they may need. Of course, the support services must be prompt and helpful.
If the customer follows through with canceling
When subscribers opt to cancel despite receiving an offer to pause, you should attempt a respectful and compelling win-back campaign. Even if you don’t succeed at retaining them now, at least leave them with a good feeling.
Ideally, your communications at this stage should feel like a special gesture instead of an obstruction to canceling. For example, sending personalized, friendly messages or offering an attractive deal is a great way to change their mind without annoying them.
For instance, you may use positive wordplay to make them stay on and feel important or even provide great bargains. Please note that through this process, providing the customer with a clear, visible option to cancel is a must.
Hulu does a great job of making compelling cancellation offers such as a month of free service. They reiterate their value proposition and follow it up with a cancellation confirmation email with an effective return hook.
Convenience, friendly service, and helpful behavior constitute excellent customer experiences in today’s competitive marketplace. Reserving these attributes only before purchase is not desirable if you want to succeed in modern subscription commerce.
If you’re looking for long-term revenue maximization, you must aim at ensuring excellent customer experiences at every touchpoint. This includes the time when a customer wishes to withdraw their subscription.
To that end, ensuring optimized cancellation flows with the freedom to cancel, flexibility to pause, and meaningful inspiration to continue to contribute to subscription success.