Proactive Churn and Recurring

Types of Churn: Delinquent vs Proactive

Churn. It can be an ugly word for any business. Whether it is in the form of a canceled subscription or someone that stops buying your products, it can make or break your bottom line. Anyone with a subscription-based business knows what it is like to watch those numbers dwindle until they hit zero. And then you have to fight hard to get them back, work hard to build trust, and hope they come back on board with your brand again. With technology being able to do most of the marketing and business processes, now is the perfect time to fight attrition and stop churn before it happens.

There are two types of churn when it comes to SaaS companies: Proactive Churn & Delinquent Churn.

What is the difference between Delinquent and Proactive Churn? Well, let’s find out here.

  • DELINQUENT CHURN

Churn is a dirty word in the world of SaaS. It’s the end goal of nearly every free trial, upsell, and cross-sell that you do: keep customers. Even good companies can experience excessive churn due to what I call delinquent churn, which includes not only churn that occurs at the end of a subscription, but also customers whose credit cards were canceled because they were maxed out, canceled because they were no longer valid (probably because they were stolen), or frozen when used overseas. In this post, we’ll look at methods to reduce delinquent churn.

How to minimize Delinquent Churn

If you are trying to find the best way to keep your customers so you don’t have to deal with delinquent churn, there are several methods for minimizing the unwanted turnover of customers. One method for reducing delinquent churn is by tracking credit card expiration dates and finding ways to make sure those dates are updated.

Dunning emails

Dunning emails are designed to let your customers know that their credit/debit card is about to expire. It’s a nice friendly way of reminding people that they need to update their cards. If you run an online business, dunning emails can save you time and money. Rather than having your customers get angry, you should use a dunning email to encourage them to renew their subscriptions or make a purchase.

 In-app notifications

 In-app notification is one of the most efficient ways to communicate with your clients. If you are wondering what in-app notification means, it is a method for notifying your clients about anything via the app they are currently using. For example, if you made a bike-sharing app and if any user has already reached their time limit. In that case, you can notify the user by showing a custom message.

 Card updaters

Credit card companies offer card updater services that provide vendors with updated expiration date information for their customers’ cards without the customers’ involvement. These services allow customers to enjoy added convenience without sacrificing the important benefits of a paper-based billing statement, such as paper statements providing proof of purchase and available credit review.

Renewal emails focused on features and benefits

Notification of renewal is a gentle reminder that your subscriptions or memberships are about to expire. This is the time for pushing features with enticing benefits. You need to deploy special tactics to make your subscribers want to spend money on an old product. The success of these messages depends on how much you give information about the rewards of becoming a subscriber.

  • PROACTIVE CHURN

Proactive Churn is the rate at which customers cancel a subscription or membership. It is especially applied to subscription goods and services, like newspaper subscriptions and software licenses. The churn rate is expressed as a percentage of total subscribers or customers at the beginning of a given period, usually one year.

Up next, the most common causes:

  • Poor Customer Fit
  • Gap between Customer Expectations and Product Performance
  • Dissatisfying User Experience

Remember that you can use Radix to analyze your SaaS or eCommerce data and prevent churn in real-time. Create your free account in less than 5 minutes here.

 

Luis Cordero Schiffmann
Luis Cordero Schiffmann
Business Developer Manager & Web3 Passionate MBA with expertise in Science, Technology, and Innovation. I'm a big fan of the crypto revolution, the internet and business.