Four Common Subscription Management Challenges and How to Overcome Them

The subscription-based business model seems like a very good idea because monthly revenue is more or less predictable, thanks to active recurring payments.

And yet these businesses face quite a few challenges when it comes to managing those recurring customers that they rely on. Here are the most common of those challenges and how to overcome them:

1. Poor Product Adoption

One common reason for customers to leave after a month or two is their failure to understand the product and how it solves their problem. It can be usability issues, product positioning issues, or expectation management issues.

In any of those cases, effective customer onboarding is what will likely help product adoption. Walking each of your clients through your platform will help your team identify and report possible UX issues, position your product based on your customers’ needs and set the expectations right.

Product adoption can be managed at the pre-subscription stage (during the trial stage) which can also boost conversions from trial to paying customers.

It is also important to closely monitor your newly subscribed users to ensure they are actively using your product and all its features. Tracking inactive users and reaching out to them is another solid way to ensure adequate product adoption.

Investing time and resources into regularly educating your subscribers is another great way to help them embrace your product more effectively. Run regular webinars or live sessions. PayKickstart offers quite a few handy integrations for that, including:

• GoToWebinar
• WebinarJeo
• Demio

2. Involuntary Churn

A business may lose a subscription not because that user wanted to leave but because of the reasons that were beyond them, like a failed payment or a technical error. This is referred to as involuntary churn (also referred to as delinquent churn).

To minimize involuntary churn and revive the majority of subscriptions, your platform should be equipped with the following:

• Automated invoicing to avoid errors and slowing down the payment process
• Multiple payment options to allow customers to quickly switched from a failing method. PayKickstart provides multiple payment integrations including PayPal and credit cards. 
• Automated notifications that alert customers of a failed payment or a soon expiring card. PayKickstart manages these notifications for you: It will send three notification before canceling an account:

3. Customer Retention

Customers may leave for a variety of reasons: 

• Changes in a decision making unit occur frequently and unexpectedly. New people bring new tools to use. They may also be unaware of why your subscription exists, or they may have no idea how to use your product effectively.
• Your customers may find a more affordable solution that fits their needs.
• They may be unhappy with their experience with talking to your customer service.

Whatever it is, you need to know those reasons to be able to fix the issues, and hopefully retain those accounts.

PayKickstart offers the “Cancellation Saver” that will prompt your user to choose the reason for canceling when they are leaving. This will allow you to identify most frequent reasons for canceling:

Based on the reason they choose, the tool will also suggest a better solution to canceling. For example, if your customer chooses “Cost” as the reason, the tool will suggest switching to a lower tier. This will save a good amount of those quitting accounts.

Another helpful feature within PayKickstart allowing you to better understand why your platform is losing customers is called “Customer Surveys”. It will encourage your customers to provide feedback when they have canceled their accounts or requested a refund:

4. Poor Customer Communication

Customer support is crucial for customer conversion and retention. According to PWC, 73% of the surveyed people point to customer experience as a crucial factor in their purchasing with about 80% of American consumers pointing to speed, convenience, knowledgeable help and friendly service as the most important elements of a positive customer experience.

Customer experience can even beat higher pricing: 86% of consumers are eager to pay more for a good customer service. Additionally, almost 70% of customers want to have the option to communicate with a company through multiple channels.

We’ve all been here: Most of us have made a purchase in a retail store because of the helpful customer service representative. We’ve picked hosting companies and platforms based on how quick and helpful the customer support has proven to be. We’ve all quit platforms because we failed to get help. Facebook and Google can afford to have non-existant customer support but for smaller brands customer service can make or break a business.

To improve your customer support strategy, you need to adopt an on-going monitoring and collaboration:

• Keep an eye on your customer communication stats (emails sent and replied, how fast emails are answered, etc.) and reward those who work harder
• Monitor your brand’s online mentions and teach your customer support to do so. Many people would use a social media platform of their choice to share feedback or ask questions. Keep in mind that those messages are public, so you (or your team) need to address them promptly.
• Put together a detailed knowledge base for your team to refer to when in doubt. It will also help your customers solve many of their problems independently and drive long-tail traffic to your site. Don’t force your customers to get help elsewhere!
• Encourage pro-active support: Get your team be the first to reach out to talk to inactive or cancelled accounts and collect their feedback (and hopefully save those subscriptions)
• Encourage cross-team collaboration. Your customer support team shouldn’t be an island! They know your customers best, and it is helpful if they share their knowledge with other teams, like sales, marketing and product development people. Better collaboration drives motivation!

Conclusion

Subscription-based business model has many benefits, and yet there are challenges to face and overcome to make it a success. Subscription management requires a well-formed strategy that includes close monitoring and involvement.

Luckily PayKickstart handles much of it for you keeping your customers updates and engaged. Try PayKickstart for free now!

Ann Smarty

Ann Smarty is the Brand Manager at Internet Marketing Ninjas, as well as co-founder of Viral Content Bee. Ann has been into Internet Marketing for over a decade, she is the former Editor-in-Chief of Search Engine Journal and contributor to prominent search and social blogs including Small Biz Trends and Mashable. Ann is also the frequent speaker at Pubcon and the host of a weekly Twitter chat #vcbuzz

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