Author Topic: Churn is the single metric that determines the success of your subs serv  (Read 254 times)


Chunkford

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Re: Churn is the single metric that determines the success of your subs serv
« Reply #1 on: October 31, 2017, 11:13:36 AM »
Good read.

There's two types of subcom business. Discovery and necessity, with discovery being the hardest one to maintain.
Having recently moved my business model from just discovery to discovery and necessity I've seen huge improvements.
I've also implemented certain ways to 'force' my customers to stay with me, such as introducing an Amazon Prime style system where they need to spend X a month to retain the benefits of being a member, and offering the ability to lock in products that are on offer (normally the products that are on discovery) in their box so when the offer has finished they still benefit. This means if they were ever to cancel then they will lose those cheap prices, forever ;)
Once they have a box being sent, then it's so much easier for me to get them to add other products to it as it's already being sent to them rather than going else where. That's where I get them to increase the profit margin of each box being sent out.
It's still early days, but so far it looks promising albeit it's taking awhile to educate the customer as it's not the norm.
"If my answers frighten you then you should cease asking scary questions"

ergophobe

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Re: Churn is the single metric that determines the success of your subs serv
« Reply #2 on: November 01, 2017, 05:14:16 PM »
Quote
net monthly churn rates below 5%

That's low for a lot of subscription businesses. It seems that one metric he's not really looking at is the amount you can get for a one-time up-front purchase, vs the amount you can get for a subscription

I bet the churn on stock photo sites is high. We have one where we pay the monthly fee, but then periodically we'll binge and sign up for another to get some other images and download as many as we can in the minimum subscription period, then cancel. The thing is, our alternative is often something like, say, $40 for the images we actually have identified and want, and $99 for the minimum subscription. So effectively, we end up paying $59 more than we would have if we only had the a la carte option.

Aside: a friend who has been a reasonably high-level manager at some giant corporations always tells me that the most important metric for measuring a manager is churn because it has a huge impact and, unlike other metrics, is often more closely tied to the manager than, say, the profits that group made (if it can even be measured on the group-level).