For a subscription box business, customer retention is going to be one of the most important metrics and indicators of the overall business’s health. If customers are cancelling at excessive rates (i.e losing more than 30% of your customer base every month), even if you are outgrowing churn, you’ve got issues with your business/product that need to be addressed immediately. Here are my top 3 suggestions for keeping retention high.
1. Product quality and experience
Be obsessive about this. Product quality is everything. From the packaging to the print materials to the products you include, don’t skimp on the details. Take the time to have custom packaging made (it will probably end up costing you less than buying stock boxes) – the more you add to the overall ‘experience’, the more value customers will see in your product. In terms of the actual products you include, make sure to avoid sending people a random variety of items (even if they all do vaguely fit within your niche), take the time to actually make the product selection feel curated and thoughtfully put together. If you’re not happy with your product, your customers won’t be happy. If it’s a matter of budget, raise your price.
2. Maintain ultra responsive customer service
If you’re a subscription box business or really any eCommerce business for that matter, your best option will most likely be to use some sort of customer service ticketing application (Zendesk is my favorite). Putting that in place is definitely step 1, but it doesn’t stop there. You need someone dedicated to customer service who makes it their mission to respond to tickets as fast as possible. These days, with many eCommerce companies not offering phone support, customers are gauging the quality of a customer service experience by how responsive they are. Also, if you are responding to tickets right away, you’re more likely to be able to prevent that customer from cancelling. Customers are more open to hearing your ‘sales pitch’ within the first couple hours after submitting a ticket. Imagine if you waited 48 hours and then finally responded with something like “Are you sure you want to cancel? next month is going to be awesome…” yeah, they’re not going to have it!
3. Acquire the right customers
You can’t do anything about your product quality or providing stellar customer service if you’ve acquired the wrong customer to begin with. Find customers that are actually relevant to your niche and who will appreciate the product you’ve put together. A good example of a bad customer is someone who subscribes to multiple subscription boxes just because they’re obsessed with the concept of getting a surprise in the mail once a month. It’s often very hard to make these types of customers happy and they almost always will cancel after 1 or 2 months.
With that said, if you pay attention to these 3 points and make them your priority when building your subscription box business (especially #1) you simply can’t go wrong!