Have you ever signed up for a service where the only option is an automatically renewing subscription? And then found that it’s a bizarrely lengthy process to cancel or pause it? This business model is becoming increasingly popular, but the experience from the customer’s perspective is usually a frustrating one. In our final article of the renewal series, we’ll be sharing some techniques you can use to optimise your customer’s renewal experience, and discussing the importance of data, technology, and communications. In our previous two instalments, we talked about the importance of customer retention, it’s impact on the business, and how you can collect insights to better understand your customers.
Below is a diagram outlining a high level customer lifecycle; though retention is one of the final stages, the renewals process can begin as soon as the initial purchase has been confirmed. Therefore, it’s vital that you begin your efforts well in advance of your customer’s renewal date.
Purchase:
There are a few tools you can start applying as soon as you’ve acquired a new customer. The first one is to keep track of their purchase date, length of subscription, and renewal date. It sounds simple, but with large volumes of customers this can often go unnoticed and it’s important to clarify the simple rules and get them right first. Think back to the as-is assessment from our previous article; if you use a CRM tool, these functionalities can often be found out-of-the-box or even manually configured with minimal technical effort.
Tracking renewals dates will enable you to send out communications at the right time. If you’re not sure what the best time is, try running some tests: do your customers react better when you send out communications immediately after they purchase, halfway through their purchasing journey, or a week before their expiry date? Ensure that you give customers an option to choose how they wish to be contacted too. Different demographics of customers will all have different preferences, and yes, snail mail is still a thing!
If you already track renewal dates, try investigating the extent to which you can automate this process. This could involve sending automatic alerts to the customer’s representative as reminders, or even automatic personalised emails straight to the customer. Remember to keep in mind your customer segmentation – for example, you might consider a call instead of an email for your high value, low volume customers to provide a more personalised touch. If you opt for a more automated method, make sure this takes into consideration the customer’s preferred channel of communication.
The second thing you can do at the purchase stage relates to billing. When you collect billing information, give customers the option to save their payment details. This will help to reduce the length of the process when it comes to renewal, making the process more convenient for the customer. Direct to-the-payment personalised URLs can also be sent out in communications to further shorten the process. Take Amazon’s “1-click” payment option – this was a breakthrough in the e-commerce industry which helped to tackle shopping cart abandonment rates.
Use and support:
By tracking use and activity, you might be able to spot the early warning signs of customers who are unlikely to renew. These symptoms could be as simple as a lack of customer activity, or perhaps frequent contact with customer support. By recognising these early signs you can make contingency plans and look at what you can do, in the meantime, to increase the likelihood of renewal.
Try reaching out to your customers to check-in with those who have recently made their purchase. Again, make use of automated and personalised messaging where possible to reduce workload for staff and improve customer engagement levels. You can use this method as a contact point to collect general feedback too, especially if there is a lack of activity. A study by ThinkJar found that only 1 out of 26 unhappy customers complained; the rest simply did not renew. It’s important not to view absence of feedback as a sign of satisfaction, and making the active effort to reach out might just be the push that customers need to voice their opinions. This will then allow you to offer specific solutions for the customer’s pain points.
From an organisational perspective, having a dedicated customer success team will also help to improve your customer’s experience. The renewals process is not the same as sales; your customers have already heard the sales pitch and renewals should be more focused on building long-term customer loyalty. If you’re a small business, make sure that your staff are trained to deal with renewals in the right way.
Retention:
At this stage, focus on giving your customers flexibility. Enabling them to choose and personalise their experience based on their needs will make the process quicker and more convenient for them, making it more likely a customer will follow through with the entire process. This could be as simple as providing the option to renew on a variety of channels – telephone, email or self-service online. If it’s appropriate for your business model, consider offering customers an option for a completely automatic renewal. If not, try making some small, but impactful automation changes like having a single sign-on functionality.
Personalisation in particular is key, with almost 85% of mobile marketers reporting benefits such as higher engagement, increased revenue and conversions. Personalisation helps you to deliver a more seamless experience, increasing speed and convenience for the customer. Think about how you can go the extra mile; when it comes to repurchasing, sometimes the small touches such as birthday gifts or discounts will be remembered.
Finally, if a customer is not about to renew immediately, how do they indicate that they are interested in leaving and can they provide reasons for wanting to leave? Use these insights to tailor your communications and offer solutions to specific problems that customers may have. For example, online grocery store Oddbox found that offering the option to pause subscriptions (which are usually weekly or fortnightly) worked well for customers who might be away on holiday for some time.
Lost customers:
What happens if a customer simply does not want to renew their purchase? Implementing a ‘win back’ process can help you to retain them as a customer for the business. Channel information that you’ve collected about the reason for churn to understand where the value was lost for the customer. Try upselling or cross-selling based on their needs. Alternatively, reach out to the customer at a later date with new products or offers that might be of interest to them.
Whichever route you decide to follow, ensure that you have a process in place to review and update the rules based on learnings. Continuous improvement is essential to keeping your data accurate and maintaining a best fit renewals process for your customers.
To find out more about renewals, check out our earlier blogs in this series:
Why you should never churn your back on renewals
How do you ensure a great customer experience when it comes to renewals?
This post was originally written by: Priya Radia