Subscription Stats: Top reasons why B2C customers unsubscribe

A successful retention strategy means knowing why your customers unsubscribe in the first place. We explain, how you can work on your messaging, target groups and buyer journeys to increase conversions and reduce churn.

Churn is part of business. However, that doesn’t mean that you should simply accept your churn rate and only increase efforts to generate more conversions.

Especially for subscription businesses, long and trusting customer relationships are key to your success. Knowing why customers unsubscribed or why they never even bothered to subscribe in the first place, can be crucial to increase loyalty and revenue.

Leading reasons consumers canceled product/service subscriptions worldwide (2023)

• 39 % – I no longer had a need for the subscription
• 39 % – Too expensive
• 31 % – Unexpected/increasing fees
• 26 % – Did not suit my lifestyle
• 25 % – Product quality was inconsistent
• 25 % – I did not like to be tied to a contract
• 23 % – Unable to customize (frequency, size, contents)
• 22 % – Deliveries were not reliable

(Source PwC via Statista, 2023)

The main reasons for customers to unsubscribe

Not enough product value

In our article “Why customers subscribe“, one of the main decision drivers is cost/value efficiency. Customers want to either save money or receive something that’s comparatively better and more convenient than a one-time purchase.

Value, in this case, is made up of many different variables that highly depend on different customer expectations and needs, competitor’s portfolios and market standards.

For example, in case of telecommunication services, a setup fee is a very normal and expected cost, which does not deter customers from subscribing. However, for a streaming service, few would accept an initial one-off fee as it is not standard market-wide.

Value also means that customers have to feel the need to use the product or service. Some subscription services and products might loose this need at a certain point. Dating platforms, job portals or learning platforms are by design not made to be needed forever.

However, sometimes, the need might also decrease because customers don’t see the value in the product anymore (maybe because the competition has more value – or better messaging).

In a survey among US customers that unsubscribed from retail product subscriptions, some of the stated reasons showed that even small product and services changes could have a huge impact on the customer loyalty (source: Statista, 2023) such as discontinuation of free shipping or loyalty offerings.

At other times, price increases can diminish the perceived value, especially if the increase is not accompanied by new features or services that are attractive to the customer.

Retention tips for subscription companies

Concentrate on the customer-centric value when you communicate your product. Sometimes, it’s a simple thing of rephrasing to make a product feature shine.

Sometimes, a product can loose value simply because it’s previous highlights have now become the norm for your customers. Find new ways to excite them (via guides, hacks, innovative use cases, etc.).

Make sure to explain why you increase prices, get rid of free deliveries or otherwise impact costs negatively for the customers (and if possible, provide value in other ways, for example by creating better clothing size charts to prevent wrong orders).

Flexibility of subscription service

Personalization and flexibility are big factors for customer loyalty. To committ to a subscription, many customers expect at least some form of flexibility to shape the subscription to their needs. This does not just include different plans but also options such as:

• Pausing a subscription easily and timely
• Ability to personalize products or select specific products
• Choosing between different frequencies and volumes
• Choosing or excluding specific products (e.g. in case of allergies or lifestyle choices)
• Up- or downgrading a subscription (many companies will offer easy upgrading but are quite cagey when it comes to immediate and simply downgrades)

Retention tips for subscription companies

Depending on the product and service, think about the level of flexibility you can and need to offer. E.g., free trials, monthly & annual subscriptions, add-ons, product customization, frequency & order options, etc.

Know your customers. Listen to feedback, comments and reviews (especially negative ones) to see what customers are missing from your product.

Customer experience throughout the subscription journey

Customers are much more likely to churn after a bad experience with your service, marketing or sales team. In fact, a bad support experience can destroy years of trust and brand loyalty.

Bad experiences do not only include human interactions but also the many different ways that touchpoints and processes can cause friction, confusion and frustration.

• If a customer does not receive a promised discount
• If their delivery is too late or doesn’t arrive at all
• If their subscription is cancelled because their credit card data is out of date but the customer never received a reminder to update the information

Retention tips for subscription companies

Make sure to test and evaluate your customer service quality and workflows on a regular basis to identify gaps. Again, listen to customer feedback but also ask your sales, marketing and service teams if there are potential points of friction in the overall customer journey.

Lifestyle choices of your subscribers

Since a subscription is not just a one-time commitment, it needs to fit the customer’s lifestyle.

There are many reasons that are often out of the control of the subscription company, that can lead a customer to churn.

• A dating app user finds their partner
• A job app user gets a new job
• A fitness studio user moves to a town that doesn’t have a nearby studio
• A meat-lover-subscription-box user turns vegetarian

Sometimes, it’s not about your services or products, your customer experience or your company. Sometimes, life just gets in the way.

Retention tips for subscription companies

Try to find ways to make a “comeback” easy and seamless for customers. A nice offboarding message for a churn that’s tied to a positive thing (a job or a relationship) is a beautiful way to make a good last impression.

In other cases, a pause function for your subscription might help reduce the full deletion of a profile or subscription. Customers can simply take a break and decide on their own when they’re ready to get back.

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Billwerk+ provides subscription management solutions that support you with the right setup, templates, hosted product pages and functionalities (discounts, add-ons, coupons) to create subscription journeys that are smooth and customizable and reduce voluntary and involuntary churn.

Set up a demo meeting with our experts today to get to know our products and find out how we can reduce your churn rate.