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Mobile Marketing
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Critical Methods and Lessons to Reduce eCommerce Customer Churn Rate

Berkem Peker
November 28, 2022

The average consumer would likely be shocked to discover how many subscription services are signed up for and what they are spending on those services each month. In fact, the problem is so acute and overwhelming that there are now services such as Truebill that help users unsubscribe from the various services that they have signed up for and forgotten about. It sounds funny until you realize the fact that consumers are now spending more than ever per month on subscriptions

The average consumer surveyed said they spend $273 per month on subscription services, up from $237 in 2018. This extra 15% equals an additional $430 spent each year. 

What service providers have discovered is that there is a gold mine in getting people signed up for subscriptions. They can generate consistent cash flow month after month simply by offering their product or service in a subscription form. Consumers are often drawn in by the low cost of entry (most subscriptions are $10 or less per month), and providers win because they receive a constant stream of payments. All of that being said, it is imperative that companies keep their churn rate low to continue to profit handsomely regardless of if their services are offered in subscription format or not. 

What is Churn Rate and How Can the Story of Netflix Aid Business Owners?

Customer churn rate

A company's churn rate is simply the percentage of customers who stop doing business with a company over a defined period of time. This term is also sometimes used to define the rate at which employees leave their jobs with a certain company, but for our purposes, we will stick with discussing the rate at which customers leave a particular service.

All companies want to keep their churn rate as low as possible in order to continue to earn as high of profits as possible. Companies can earn a low churn rate by ensuring that their products or service is particularly useful, hard for people to part with, or so inexpensive that consumers are willing to absorb the cost. 

Netflix Tells a Story Every Time You Open Their App

Netflix application

One company that has earned a reputation for an exceptionally low churn rate is Netflix. At just a 2.4% churn rate in 2021, the company earned a rate that is far below the industry average of around 7%. Even better, Netflix managed to do so while still increasing their average revenue per user each and every year and hiking their subscription prices consistently. Many people attribute these wonderful figures to the fact that the company has a superb app (both smartphone and smart tv) that tells a story every time you open it. 

Competitors in the video streaming space have often focused their efforts on acquiring content and attempting to grow their subscriber base. However, the rush to compete with Netflix has made some of these companies focus less and less on the hardware that makes a streaming service really work. Their apps are clunky and lack the attractiveness of the Netflix app. They are easier to unsubscribe from because they are far less memorable and enticing. Thus, the industry has a much higher churn rate than Netflix does. 

Dazzle Your Audience Through Storytelling

When customers are shopping via your app, they aren't just looking to purchase items from you. They could open any number of apps and likely find products that are similar to what you are selling. Instead, they are interested in a unique shopping experience that makes them feel like a valued customer. They want to see something different from everything else on the Internet. 

One way to keep people coming back for more is to focus on storytelling in your app. Imagine this scenario to get a better idea of what this might look like.

Scenario: 

You run a clothing shop with a smartphone app to sell your garments to customers in a convenient way. When they open your app they see an array of people wearing your clothing in a variety of dynamic settings. Perhaps those people are at a concert, a business meeting, or a birthday party. Whatever setting makes sense for the type of clothing that you are pitching is what the customer would see. You might even set up the app to display different people in different scenarios with different outfits each time. This kind of thing encourages people to think of your product in a certain way and to picture themselves wearing your product as well. 

It is not necessary to be in the clothing business for this type of practice to work. It can happen with virtually any product that you are selling. You just need to create an image around your product that is appealing to people and makes them think that they cannot go on without purchasing your product or service. 


Incorporate Your Product Into Current Events

Not everyone would tell you that it is a good idea to try to weave your product into current events, and there are reasons for caution when attempting this. However, some brands have found great success in attaching themselves in some way to things that are happening in the world.

Leveraging Social Media

One of the best ways to be part of the global conversation is to have a stake in what is happening on social media. Trending topics are easily visible to any user and any company. When brands use trending topics to promote themselves in a creative way they are often rewarded with a renewed wave of attention. Additionally, some companies are creative enough to come up with their own marketing campaigns that go viral on social media. That is yet another way to get the word out. 

It is wise to include social media feed information on your mobile app and homepage. Not only should a visitor easily be able to find and connect with your brand on social media, but they ought to see a live feed of the things that you post on social media available on your app as well. This is useful because it may enhance any big hits that you have on social media to yet another audience of people who might not otherwise have had the chance to see these things. 

Taking a Local Approach

Another thing to add to your mobile app is any events that you intend to host in the local area from which you operate. When you show that your company is the kind of brand that is both proud of the community in which it operates and happy to host events in the area, you set yourself up for an extra dose of goodwill from local people. 

People love to see their favorite brands as sponsors of local events or even as the host of those events. You can set up as much marketing information as you want at those events, and you can connect with people who might not have heard of your brand had it not been for this event. This is a great way to reduce the churn rate because people are more likely to stick with a company that they know has a local connection to their area.

Identify Customer Behaviors to Best Understand Them

Man browsing a website on his smartphone

In some cases, the best way to improve churn rate is to simply better understand who your customers really are. Smartinsights.com explains it like this: 

There's a big difference between someone who's loyally been using your service for months and one who didn't convert after a free 30-day trial. Segmenting your users into different groups can help you target them correctly for different circumstances – conversion and recovery.

They believe that it is critical that companies understand that not all customers are created equal, and it is unwise to treat them as if they are. Targeting customers based on their observed behavior is much more effective than assuming that all customers are going to have the same types of reactions to your marketing efforts.

Some companies have gone so far as to observe the time spent by different customers on their apps. When they noticed that some of those customers took an exceptionally long time, they assumed that the customer might be having difficulty with some aspect of the shopping process and they sent them an email to offer assistance in completing the transaction. This is a great way to show customers that you are there to help them and that you are paying attention to their concerns. Instead of having a frustrated customer who immediately cancels their subscription and/or orders, these companies are often able to capture that customer before they drift away. 

Notice "At-Risk" Behavior

There are often several warning signs that a customer gives off before they unsubscribe to your service. You can identify those signs and step in to try to keep them as a customer if you know what to look for. A few of the signs to note include:

  • A Customer Changes Their Visit Frequency
     If someone used to visit your website or app on a daily or semi-daily basis and has now reduced their visit time to weekly or less, they may be growing weary of your service and might be about to take the leap to unsubscribe. You might want to reach out to them via e-mail and promote the benefits of your service once again. 
  • They Begin to Look at Your Unsubscribe Policies
    It is a giant red flag if a customer begins to look at the unsubscribe policies that are laid out on your website. This means that they have given some serious thought to the idea of dropping your service. It is certainly a risk to your bottom line if they decide to move forward and truly unsubscribe. Naturally, you will want to do everything in your power to convince them otherwise.
  • They Change Their Payment Information
    This could be a routine update of their credit card, but it could also be something that a customer does when they don't want to be charged anymore. Instead of unsubscribing, some customers simply change their payment information to a card that doesn't have money on it, is expired, or otherwise cannot submit a real payment. This is their way of getting out of the service without going through the formal steps of unsubscribing. In this case, you might want to offer them the service for free for a period of time to try to draw them back in. 

It might not be possible to stop every customer who is determined to leave your service from doing so, but if you notice some of these at-risk behaviors, you might cut off some of the would-be ship jumpers. 

Renew Your Focus on Customer Service

There is no better time than the present to think about customer service yet again. Remember, one of the biggest reasons why people abandon services that they previously used is because they are frustrated by a lack of communication when they have a question or issue. You can stave off a lot of those problems by redoubling your efforts to offer the best customer service possible. 

Something as small as adding a customer service chat widget to your website can help keep customers around who would have certainly left your service otherwise. Make sure that any addition like this is displayed prominently on your website, and also make it clear to customers that you are adding these measures for their benefit. If you do both of those things your customers will understand that you are taking steps to make their experience better. 

Take Control of Your Story With Storyly

There are a lot of things to consider when working on improving your churn rate. If you are ready to begin taking strides in the right direction, we ask that you reach out to us at storyly.io. We are all about helping companies and brands tell the stories that they want to tell via their websites and apps. We have helped countless partners do exactly that, and we are thrilled to offer these same services to you. After reviewing your particular needs, we will come up with a plan that is best suited to reach those goals. We will work hand in hand with you to lower your churn rate via a variety of tried and true techniques. If you are ready to start making these positive changes, please contact us today!  

Berkem Peker

Berkem is master of none, jack of all trades. Happens to be a Growth Strategist at Storyly. Knows/writes about growth frameworks and user behavior.

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