Are you wondering why customers leave? Subscription businesses have grown significantly in popularity in recent years. About half of consumers now subscribe to at least one media subscription service. And more than 15 percent have signed up for subscription services from e-commerce companies.
You want your business to be successful over a long period of time. So you need to maintain a consistent customer base. It’s not enough to constantly attract new customers. So learning more about your customers and making improvements to keep them happy can have a positive impact on your overall numbers.
Brightback is a customer segmentation tool that allows subscription businesses to easily understand why customers are leaving so you can address their concerns and ultimately improve customer retention. Here’s what you should know about this option and what businesses of all types can learn from customers looking to leave.
Benefits of learning why customers churn
Guy Marion, CEO of Brightback, said in a phone interview with Small Business Trends: “We’re getting to a point in the industry where just focusing on growth, growth, growth is no longer enough.” Retaining customers is the best way to improve profitability.”
If you run a subscription business, you lose money every time someone clicks the unsubscribe button. So find out the reason why the customer is leaving the company. And you may be able to create a new offer that addresses their concerns and convinces them to stay.
Even if you can’t stop this particular customer from leaving, their concerns may apply to others as well. So addressing these issues can help prevent even greater churn in the future.
This general concept also applies to businesses outside of the subscription space. Even without the special logout button. Do you regularly survey customers and former customers? How about digging deeper into the reviews and feedback you receive? You may find patterns or areas where your company could improve the customer experience. This could ultimately help you convert more people into repeat customers. And it could improve overall satisfaction.
Common reasons why customers leave
For subscription-based businesses, there are a few reasons why customers leave that you can’t do much about. For example, it could be that a customer simply no longer needs your product or service. Or their budget may have changed. And they will not be allowed to continue paying the monthly or quarterly costs.
However, there are also many reasons why customers might leave that you can ultimately address.
Marion says, “Businesses are constantly losing customers that they shouldn’t be losing because of a negative customer service interaction or because they simply don’t see the value of what they’re paying for.”
The most common reasons customers leave include:
- Inadequate onboarding – If your product or service is complicated and requires training or explanation, your current materials may not be sufficient to get the full benefit.
- Negative customer service experiences – Customers may be frustrated by long wait times when calling your help desk or a lack of helpful responses from your staff. In this case, additional training or responsibility may be required.
- Lack of value – Some customers may have the budget for your product but just don’t feel like they get enough out of it to justify the cost, so an additional offer or add-on can be helpful.
- High prices – This is similar to a lack of value. However, some customers may respond more to an offer of discounts or deals rather than additional content or value.
What you can do about it
If you want to salvage relationships with customers who try to unsubscribe from your product or service, you need to act quickly and address their specific concerns.
Marion says: “You have to break down the reasons and then find quick, actionable solutions that you can take. For example, if you are having problems with onboarding, you may need to improve your teaching materials and make them less complicated.”
Brightback automates this process. It segments customers and tests different offers to prevent unsubscribe. You can create your own custom filters. And then direct customers to the landing pages that are most relevant to them.
For example, someone might go to a page offering them a cheaper deal, while another might go to a page offering them a digital version of the product they subscribed to.
If you’re not a subscription-based business or don’t have access to tools that can help you automate this process, you can still try keeping this general idea in mind. Learning from your customers who are leaving will help you better understand the risks your business faces.
When you know the negative aspects of your customer experience, you have a better chance of addressing them and preventing them from becoming a problem in the future.
Use regular surveys, reviews or tools like Brightback. Constantly learn from your customers. That’s the key. And insights from dissatisfied customers or those at risk of leaving the company can be particularly useful.
Why customers leave the summary
| Reasons for the customer’s departure | Explanation | Potential solutions |
|---|---|---|
| Inadequate onboarding | Customers may have difficulty fully understanding or using the product due to a lack of effective training or explanation materials, which reduces the value of the product from their perspective. | Improve training materials, simplify the onboarding process, or introduce step-by-step instructions to help customers get started. |
| Negative experiences with customer service | Poor customer service, such as long wait times or unhelpful responses from staff, can frustrate customers and cause them to unsubscribe. | Provide additional training for customer service agents, implement accountability measures, or introduce new customer service channels (e.g. live chat, hotline). |
| Lack of value | Customers may feel that the product’s benefits do not justify its cost, even if they can afford it, suggesting that they do not see sufficient benefit or advantage in maintaining the service. | Develop additional offerings, introduce value-added services or features, or create personalized packages that are more directly tailored to customer needs. |
| High prices | Some customers may find the cost too high relative to the value received, or they may encounter budget constraints that force them to re-evaluate their subscriptions. | Introduce different pricing tiers, offer discounts or special offers, or offer exclusive content or perks to increase perceived value. |
Image: Depositphotos.com