29 Jun Support Subscriber Retention with Upsells, Cross-sells and Downgrades
What causes a customer to disengage from a subscription model? It is a question that is forever on the mind of businesses that offer subscription-based services. You already know that it’s not enough to just gain new subscribers. It’s also crucial to retain the ones that have already invested in your service – something that’s often more nuanced than it originally seems.
The naïve in business think that if you offer a great product or service and follow all the rules of good customer service, that growth is a guarantee. If only it were that simple.
Each of your subscribers is an individual, and they need to be looked at as such. While you might have a large group of subscribers using the same service for the same purpose, you can’t assume that they’re all thinking the same thing.
The secret to customer retention is being able to step back, look at their unique journey and discover how you can adapt your product or service offerings to meet their needs, make them happy and keep them from becoming the dreaded churn.
There is a point, right before you lose a subscriber, that you have the chance to win them back. Often the reason they’re thinking about leaving is that what you’re offering just isn’t fitting their needs as well as they hoped. One way of reaching out to them, and retaining a customer rather than losing one, is by appealing to them with an upsell, cross-sell or downgrade.
Upselling is great because it means more revenue per client. It’s can also be quite tricky, especially when you’re looking at a subscriber that’s getting ready to walk out the door. Your goal with upselling should be to offer the client more value, but the wrong approach can easily come off as salesy or even desperate.
The most important thing to understand is that upselling is only the best approach for a certain type of subscriber – the one that has been with your service, is familiar with the value you offer and has outgrown what they’re currently using.
The idea is that upselling moves a subscriber deeper into your business. The deeper they are, the more invested they are and the less likely they are to leave. Take for example the subscriber that’s been with you for one annual cycle. They’ve been satisfied with the experience, but maybe their wondering what another service will offer.This is a perfect point to appeal to them with an upsell and show them the expanse of the great products or services you offer.
Cross-selling Brings Them in Deeper
As mentioned earlier, the further invested a client is with your product or service, the harder it is for them to leave. Cross-selling is one way of encouraging consumers to further invest in a business by making complementary purchases.
Upselling and cross-selling are often confused because they seem quite similar, however in concept they’re very different. Where upselling is the art of convincing a subscriber that they want a new, elevated product or service, cross-selling is about complementing their current experience to make it more rewarding.
As an example, let’s look at how a wine subscription can encourage retention with a cross-sell.
Say a subscriber has been with the service for a while and it just isn’t exciting them like it did when they first signed on. It isn’t that anything is wrong with the service, but they’re wondering if they really need wine delivered to their door every month. It’s starting to seem like an unnecessary luxury.
As they approach the end of their subscription cycle, the service sends out an offer for limited edition wine glasses with an additional incentive of a discount on an annual subscription cost with purchase. As part of their marketing, they appeal to the specialness of the glasses and connect it to treating yourself with the wine.
The subscriber who chooses this offer not only scored a set of gorgeous glasses, but also a great deal on their new subscription. Plus, every time that they see those glasses in their home, they will be reminded of where they came from, a strategy that keeps the subscription service on their mind.
Cross-sells are meant to enhance the customer experience and promote a deeper emotional and financial connection between the consumer and the brand.
Downgrading Takes the Pressure Off
When it comes to revenue building strategies, downgrading doesn’t usually make the list. But, when it comes to subscriber retention in can be just the right tactic.
There’s a variety of reasons that subscribers leave. One of the most common is that they just don’t feel like they’re getting enough value for what they’re paying. It might not be that you aren’t offering enough, but instead that they don’t need the complete package and are wondering why they should continue to pay for something that they’re not fully optimizing.
Nobody likes to waste money, so this makes perfect sense. The solution to this is help the subscriber see that there are ways to scale back with less expensive options. For example, a premium subscriber might be happier going back to a basic account.
Although this feels like a loss at first, the revenue saved by retaining the customer far exceeds anything that’s lost in the process. Plus, you’ve made them happy by showing them you respect them and recognize their needs. This is a perfect formula for retention and customer satisfaction.
Customer retention is key to a thriving business and the right approach makes all the difference in the outcome. While you’re focusing on retention, don’t forget about the other details, like making sure that changes in their account are billed properly, partial service periods are prorated, changes in subscription plans are traceable for support and audit purposes, etc. A subscription billing or automated bill payment system can help guarantee continued subscriber satisfaction long after you’ve convinced them to stay.