Attracting customers is like wooing a romantic partner. You pull out all the stops in the beginning—flowers, dinners, free e-books. But once you’ve made it official and those prospects become paying customers, you start wearing your weekend sweatpants and letting the product team do the heavy lifting.
After all, these customers have already subscribed and love what you offer. They’d never think of leaving you, right?
Companies that slack on customer service after initial conversions are in for rude awakenings. That’s why many brands handle subscription cancellations so poorly. They haven’t nurtured their relationships, so they resort to desperate, annoying ploys to get people to stay.
The cable giant Comcast is notorious for making it nearly impossible to cancel service. Home retailers are the same when it comes to their catalogs. Sometimes I think Restoration Hardware cuts down a tree every year just for me, judging by the massive catalogs I continue to receive no matter how many times I ask to be removed from the list.
These are poor, shortsighted retention strategies. Even if a customer does throw up his hands in frustration the first time he tries to cancel his Comcast subscription, he will eventually succeed. In fact, companies such as Airpaper and PaperKarma allow users to outsource aggravating cancellation conversations to make sure the job gets done, no matter how persistent the vendor. And once those customers finally do break free, they’re never coming back.
I’m not saying to give them up without a fight—just that there are better ways to retain them as subscribers. If you’re struggling to keep cancellations from devolving into power plays and standoffs, consider the following:
• Don’t obscure the process: You know how frustrating it is to navigate companies’ stall tactics when you just want to cancel a service and move on. Invite customers to reconsider, but don’t make them jump through hoops if they don’t want your product anymore. Avoid having a phone-in cancellation policy unless it’s absolutely necessary. Forcing people to speak to reps is a cheap trick, and customers will see right through it.
• Offer alternatives: Ask customers why they’re leaving, and have a helpful suggestion ready for each reason. You can include a simple Q&A on the cancellation page with automated responses for the most common answers. If someone says he’s traveling and doesn’t need the service while he’s gone, reply with, “Not a problem! We can put your account on hold, and we won’t bill you until you’re back.” Maybe another customer no longer uses a particular product. Program the system to show her newly released features that make it more appealing, or suggest that she speak with a product specialist.
Some customers will cancel anyway, but at least you’ve shown that you’re willing to accommodate their needs, which reflects positively on the company.
• Give your retention team the right resources: At most companies, acquisition and retention teams work independently of each other, and the latter has a significantly smaller budget, if any at all. It’s a missed opportunity. Your retention department should constantly run conversion tests aimed at reducing cancellations. They can see what works well in your pages and optimize accordingly.
Many brands mistakenly assume that marketing gets people in the door and the product team keeps them at the party. These businesses invest more in acquisition than retention, not realizing they might spend up to seven times more bringing new customers on board than they would just by keeping their current clients happy. Retention teams can also use social media to engage customers, activating them and making them good subscribers. Considering that 20% of your current customers will generate 80% of your future profit, you want to keep your people happy.
• Maintain customer service: If clients insist on leaving, be courteous to the end. When you invite them to resubscribe in the future, you don’t want their most vivid memories to be of how poorly you treated them when they tried to leave. American companies lose $83 billion a year on bad customer service. Don’t be one of them.
• Establish a post-cancellation engagement strategy: I’m amazed by how many companies chalk up their cancellations as losses and never go after those customers again. You already have data on them, and they’ve already shown they’re willing to work with you. Don’t dismiss this pool of ex-subscribers. Rekindle their interest. Target them with ads that actually matter to them, and use social media and display partnerships to get back on their radars.
Netflix re-engages its customers by sending them emails tailored to their viewing histories. The marketing department might message someone with: “We know you enjoyed X program about superheroes. Did you know we just added these similar shows?”
Take time to personalize your outreach, and tell your customers stories about what they want. Don’t just hit them over the heads with generic coupons and shrug your shoulders when they don’t come back.
You never want to lose customers, and you should do whatever you can to avoid cancellations. It can take months to get customers to resubscribe, costing you money and momentum, but sometimes cancellations can’t be avoided, so remember to take the long view when they occur. After all, you know what they say about relationships: If you love someone, let her go.
If she comes back, you know you’ve got a great re-engagement strategy.