The Top Causes of Customer Subscription Cancellations

One of the biggest challenges that subscription-based businesses face is preventing customer subscription cancellations. Often, these enterprises are left wondering what pushed their customers to churn or abandon their subscription when everything seemed to be going so well. If you are more focused on generating leads instead of growing your relationship with the people who have signed up to your subscription business, then this may be the root cause of their dissatisfaction.

To help you prevent further churns from happening in the future, we are providing you with a summary of the most common causes of customer subscription cancellations. This way, you can better think about the changes or measures that you need to implement in order to reduce your current churn rate.

Cancelled subscription

Payment Transaction Failures

When you already have customers who are willing to shell out cash for your products or services, you have to make sure that all payment transactions are as frictionless as possible. Few things are as annoying to customers as payment transaction failures. This can happen for any number of reasons, including using an expired credit card, exceeding one’s credit limit, trying to use a card which was previously stolen, or even changing one’s address.

Whatever the reason, payment transaction failures are easily preventable if you use the right tools. For instance, an intelligent SaaS-based recurring payment solution can examine why a transaction failed and apply the necessary remediation to prevent further failures. Such a tool should also allow customers to retry payments with the same card, to easily update their card information, or to store backup payment methods, which they can use when their primary payment method fails.

Non-Transparent Pricing and Increase in Prices

Customers are more likely to abandon their cart or to cancel their subscription if you consistently surprise them with hidden fees or prices that are not in accordance with their expectations. It is important, for example, to be upfront with your tax and shipping costs.

Now, if the main issue is an increase in the prices of your products or services, you also have to be very clear to your customers as to why you are charging more. This is especially true if your value proposition is the low cost of your products or services in the first place.

Inability to Scale Up or Down

Customer needs tend to change over time. Your clients may want to make adjustments to their subscriptions depending on their current requirements, so they should be easily be able to scale up or down—to have access to more advanced features for a fee, or to use fewer features with the option of adopting a lower price structure. This way, your customers won’t have to look for alternatives elsewhere.

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Bad Customer Service

When all is said and done, there could actually be a simple but critical reason why your customer abandoned ship—poor experience doing business with your company. There is probably nothing worse for customers than to be treated like their concerns don’t matter, or worse, to be dealt with in a rude or unprofessional manner. To make matters worse, bad customer service can be exponentially disadvantageous because spurned customers can then spread the word about how bad your service is. Needless to say, you should make sure that all customer issues, especially those concerning the quality of your products and services, are dealt with as quickly and in the most empathetic way possible.

Because acquiring new customers can be several times more costly than retaining existing ones, it goes without saying that you should implement measures that will keep subscription cancellations at bay. Aside from actually maintaining the quality of your products and services, you should constantly keep in touch with your customers in order to gather actionable insights from their individual experiences with your business. You should also afford them the flexibility to adjust their subscriptions with ease. This way, they won’t have to totally abandon your service, but simply make the necessary changes to accommodate their current requirements.