How to Prevent Cancellations on Your Subscription-Based Business 54

How to Prevent Cancellations on Your Subscription-Based Business

The following article is a guest post.

Subscription-based businesses are some of today’s most profitable companies. Thanks to their model of choice, they’re able to secure longer and more profitable relationships with their patrons.

However, simply using the subscription-based business model and taking in new customers doesn’t automatically mean you’ll be set for success.

Success for a business like this comes with the ability to extend subscriptions as much as you possibly could.

If you analyze the stories of companies such as Netflix, GoDaddy, Dollar Shave Club and Spotify, you’ll discover that all of them excel at several areas of customer retention.

Customer retention is all about staying relevant, keeping customers happy and addressing issues when they inevitably arise.

While most of us don’t have millions of dollars to throw at this aspect of business, we can all follow a few simple principles that work well with businesses of every size.

Here are five of the most important ones that you can apply to any subscription-based business:

1. Meet or Surpass Expectations.

Satisfaction is mostly a matter of meeting the expectations that were set when the customer subscribed to your service.

The timeless wisdom of the adage “underpromise and overdeliver” applies here.

Be very accurate and sober in your marketing. Avoid unnecessary hype that may skew the perceptions of your target audience.

Above all, make sure that your product or service actually does what it’s supposed to do.

2. Address Problems Early.

After the customer signs up, make sure that he doesn’t feel like your level of engagement with him has diminished.

A day or two after the customer receives the product or starts with the service, ask them how they’re doing. Be very helpful and without being intrusive. Make them feel that you’re ready in case they need assistance with anything.

Having a pre-produced library of user guides and help topics is very helpful. Developing a community based on a support forum is even better.

If you don’t have the budget for a call center team, at least have one person who can answer customer support calls. If you’re a startup, chat and email support are fine.

Encourage customers to raise an issue as early as possible. This usually means that their frustration levels are still relatively low and you can deal with them while they’re still very calm. Having this policy also means that whatever issues they’re having with your product or service is still in the early stages and are much easier to resolve.

3. Reward Customer Loyalty.

As a subscription grows longer, the customer’s lifetime value also becomes greater. As the guaranteed profit grows, business owners find themselves with greater flexibility on pricing.

With this kind of leeway, it’s a good idea to give back to your customers a bit with discounts, freebies and rebates. Sure, this cuts down on overall margins, but on a grander scale it discourages opt-outs and allows you to extract even more revenue from the subscription.

When you put things into perspective, this is really a more cost-effective way to maintain your market share than trying to acquire replacement customers.

4. Be Proactive with Payment Issues.

There will be instances when customer payments will hit a snag. A credit card can expire or a PayPal account could be cancelled.

When this happens, don’t assume that the customer will immediately take notice and fix it. Call or email the customer about the situation and offer kind assistance to resolve the issue.

As much as possible, give the customer time to iron out the billing kinks before you freeze or cancel their account.

5. Use Analytics.

If your subscription-based business mostly works on a web-based platform, use an analytics solution to monitor customer behavior. This helps you gain valuable insights on where they get stuck and frustrated.

Analytics can also reveal the preferences of your best customers. If the Pareto principle holds true and 20% of your customers really drive 80% of your results, it’s worth paying attention to their interests and pain points.

Keep in mind that it’s doubly tough and expensive to acquire new customers than to keep existing ones. Make sure to align your company’s priorities towards satisfying the people who keep your subscription-based business running.

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The Five Elements of Flawless Customer Experience 11

The Five Elements of Flawless Customer Experience

Providing a flawless customer experience is the ultimate goal for any business.

There’s a lot that goes into creating a customer experience that keeps your clients coming back for more. In fact, there’s so much involved that it can almost seem overwhelming.

However, providing a flawless customer experience becomes much easier when you approach the task through these five distinct elements:

Ownership of Emotions
The Unexpected


When it comes to your customers’ satisfaction, time is essential. Think of how a great experience at a new restaurant quickly sours if you’re left waiting for your food to arrive. Think of how your excitement over a great department store sale turns into frustration as you stand in line for what seems like hours.

Time is your most valuable resource and it is up to you to make sure you’re using your customers’ time wisely.

This is why restaurants have comfortable waiting areas with drinks and appetizers, or why airports have lounges with restaurants, shops, and even bars.

If your customers are being forced to wait for a service, make them feel as if their time spent is not wasted. The more positive drivers you offer customers, the less likely they are to grow dissatisfied with their experience.

Think of how you can implement this in your own business. Are there places where you can help fill customers’ time? Are there places where technology can be used to cut down on the time it takes to complete a task? Remember, it’s the customers’ time that should be valued, not your own.


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You must understand what your customers want, when they want it, and how.

While this may seem daunting, getting a better understanding of your customers doesn’t take millions of dollars, complex data analytics, and a degree in psychology. Instead, all it takes is a simple look. Watch their process, engage with them, ask them questions, and listen to them.  

How are customers interacting with your product? What’s the first thing they do when they enter your store? What’s the last thing they do before they leave? How long are they spending in each department? Do you notice anything that hampers their experience?

Take a look at your competitors. How are your potential customers interacting with them? What does this business offer that you don’t or vice versa? What is your, as Harvard Business School professor Clayton M. Christensen says, “job to be done?” What are your customers hiring your product or service to accomplish? Understand why your users are turning to your products.

Ownership of Emotions

Many companies have already taken hold of their customers’ emotions, though cynically. Subliminal advertising is a key example. However, the ownership of emotions does not have to be cynical. When used correctly, it can be the “holy grail” for companies.

Owning emotions begins with the aforementioned ability to understand. When you truly understand a customer’s choices and then act to make the experience better, you’re building a relationship of trust. That trust is the foundation of emotional ownership.

One way to build this trust is to reduce the “emotional” noise that surrounds your customers. Let them know that, even on their worst day, your business or product is there for them and that it will be a constant in their lives.

Think of restaurants and the long wait times you have to endure when they’re busy. Think of how angry—or “hangry”—you feel as you stand around, waiting for your table, and listening to your stomach growl. However, think of how some restaurants are able to reduce that emotional noise by serving you finger foods and drinks as you wait.

Also, seek to understand what emotionally motivates your customers.

Why should they be motivated to visit your store or use your product? To feel confident? Free? Unique? Secure? Successful? Research shows that all human beings are motivated by one of those factors.

The Unexpected

Experiences become stronger and more memorable when they’re accompanied by an element of surprise. Surprise can be addictive, which will only keep your customers coming back for more.

Think about mailing your customers or clients small packages with gifts and swag. Everyone loves to get mail and everyone loves free stuff, especially when it’s least expected.

A surprise doesn’t have to be a huge flash mob (though it could be!). Hand out snacks at your store. Is it a cold day? Give your customers hot chocolate or warm punch. Is it a client’s birthday? Send a card! Even a small note of thanks for a customer’s business is a nice little surprise.

The most important thing to remember: simply be sincere and don’t become predictable. Chocolates on hotel pillows were once a great surprise for guests. However, now that their wow-factor has faded, hotels are continuously trying to get back to the “unexpected.”


You’ve made promises and established goals. The only thing that’s left is to follow through on them. This starts with creating your mission statement, one that you, your employees, and your customers can commit to it. This will define your customer experience.

Your mission statement must promise to impact yourself/your business, the community, or the world. It may commit to impacting one, or all three. However, whatever it promises, you must follow through on. Your customers’ trust, and thus their experience, depends on it.

More about these five elements can be discovered in Unforgettable: Designing Customer Experiences that Stick, to be published in 2018.

Kyle H. David has made a career in technology and entrepreneurship for nearly 20 years. In 2001, he formed The Kyle David Group, now KDG. Over the past 16 years, KDG has grown at a rapid pace, attracting clients ranging from the United States Senate to major financial institutions, international nonprofits, and Division I universities.