Retention Strategies are Key for Subscription Business Survival
Where are you taking bullets? A survival deviation story.
During WWII, the allies mapped bullet holes in planes hit by Nazi anti-aircraft fire.
The goal was simple: strengthen the planes by reinforcing areas heavily damaged by enemy artillery to withstand future battles and prevent aircraft casualties.
The US military’s immediate decision was to add additional armour to the areas of the plane with the reddest dots (which received the most bullets). Theoretically, it was a logical deduction. After all, these were the most damaged areas.
But Abraham Wald, a mathematician, came to a very different conclusion: the red dots represented only the damage done to planes that could return home. Wald surmised that the engines were the most vulnerable. If the engines were hit, the plane and its pilot went down and didn’t return to base to be counted in the research.
This is known as survival deviation and happens when you focus on only the survivors (your successes) when you should focus on those that didn’t survive (your failures).
Insight and perspective change everything.
Your Subscription Business is Taking Bullets
So, where are you taking the bullets? Where should you act?
With rapidly rising customer acquisition costs, each sale needs to go that much further. We now know that COVID-19 has accelerated the subscription economy and customer acquisition, but it has become harder to retain those same customers1. If you’re not focused on customer retention, you’re ultimately building a house of cards.
I’m going to toss out a pretty heavy statement now: The best companies in the world focus on incremental improvements in retention.
Approach churn with the motto “One step, one customer, one save at a time,” and you’ll start to see the incredible compounding impacts of retention.
Think of it like this: You can fall in love with a novel, but to understand why you have to analyze the words themselves. A painting can inspire you, but you must look at the brush strokes to understand the beauty.
And the same goes for retention.
Shift Your Perspective
So today, step closer. Hone in on the individual brush strokes and shift your perspective.
How many of your customers are you losing due to payment failure and involuntary churn?
Is your MCC the best fit for your business type?
Do you have an antiquated system for updating credit cards?
How rigid is your process for retrying declines?
These are tough questions to answer for any subscription business. We are here for you. You’re not alone. Let’s enter 2021 with a growth plan that makes sense. For any questions — I invite you to reach out today and every day. Subscription success is possible – so let’s do it together.
Make sure you check out our other article on tips to reduce involuntary churn.