You’ve set up your tea subscription business. It’s been going well, and you’re so happy with how things are turning out. It’s been your passion for so long, and you’re glad that you’re helping people discover the joy of drinking tea.
But then you start to notice customers leaving. You’re losing subscribers. And you gotta admit, it hurts both your heart and your pocket. Because customer churn results in a loss of revenue for your business.
So How Do You Prevent Your Customers from Churning?
Before we answer that, let’s figure out first what churn means. In essence, churn means the rate at which your subscription service would lose subscribers because of cancellations or subscriptions that have just been left to slip away.
To have a successful tea subscription business or service, you must not only be good at acquiring customers but also be good at keeping them.
Pay close attention to the signs that may mean that your customers are leaving. According to Gravy, you can spot the not-so-obvious signs that your customers are about to cancel their subscriptions. For tea subscription boxes though, it’s a little harder to notice things like engagement and use of service since customers do not have to log into your website to enjoy their tea. According to Recurly Research, box-of-the-month subscriptions have a whopping 10 percent churn! This maturing category is driven by whether the box contains necessities or luxuries, discoveries or lifestyle essentials.
That doesn't mean that it’s all Hail Mary.
Here are practical and doable things to implement, so you can make your heart happy and your pockets, too!
1. Be Creative
Make every month a new tea experience. Always be on top of the trends and get to know your customer base intimately. Tailor your approach for every segment. Whether they are millennials or the boomer generation, think about the best approach to keep them hooked on tea. Have separate programs, as well as promos, and special discounts to generate excitement and convert it into actual purchases. Deliver innovations (such as healthy teas, cold brews, or “hard teas” that are targeted at Millennials and Gen Z, which according to World Tea News, make up for the “robust growth” in the tea market.
2. Educate Your Tea Subscribers
Start your customer’s journey with an education campaign. Getting a better retention rate can start the moment you acquire your customers. Have an excellent drip newsletter campaign that educates your customers on history, different types of teas, what other teas they can try, how to mix and match flavors; there are literally a thousand different combinations they can try that they haven't tried yet. Teach them how to go beyond being aficionados to experts by clearly explaining how to use your products and highlighting the value at every single turn. Have classes and even courses that can make them into loud and proud tea connoisseurs. A better understanding of your product deepens your customers' connection with your brand. But remember to make them fun. No one wants a boring newsletter or too high-falutin’ tea classes.
3. Have a Plan in Place for Churn
Churning is not an instant decision. It can be the little things here and there, culminating into a final blow. For voluntary churn, customers leave minor signs here and there. If you want to stop them from leaving, be on the lookout for these signs.
Be proactive. If you pay attention, you can always detect the signals of your customer’s impending departure. For example, did you notice that some have not purchased anything for the past three months?
When a customer becomes inactive for a pre-defined period of time, sending an “activation” email campaign can reengage them with your business and remind them of your value. Actions like these result in happy customers that stay.
4. Reach Out to Your Customers Personally
Tea subscriptions can be very personal. It’s a social drink that people have set up traditions and rituals for. You can also use this to offer a one-on-one meeting to address any questions they may have. Use this to reignite your customers who might be feeling less enthusiastic. Get into the ritual of communicating with your clients.
To keep customers and increase customer lifetime value, you must take the time to personalize your outreach.
Gravy, for example, has been at the forefront of personalization, and it has become the bedrock of our payment recovery. If you have a support team, you must train them to constantly personalize messages, especially to repeat customers.
5. Reward Your VIP Customers
The Pareto Principle can help you figure out who your VIPs are. They might be small in number but are the ones who deliver most of your income. Knowing who brings you the most revenue allows you to allocate your time and resources efficiently, as well as increase your chances of cross-selling or up-selling. Make them feel that as your best customers, you acknowledge them as a partner.
Give them incentives to stay and reward them to increase their loyalty to your product. For example, create a loyalty program that rewards them for using your products and services.
6. Ask Your Customers About Your Service
Solving your churn problems can become problematic if you're customers are not heard.
Unfortunately, just one in 26 customers complain when they are unhappy – all the remainder churn happens without customers saying a word or providing feedback. So, your messaging will have to be able to make the customer feel that their feedback is valuable.
Reaching out to your customers via a questionnaire, survey or just a quick email helps your clients feel that they aren’t just numbers to you.
You can ask them if your product is what they expected, if there is some way you can improve, or if the customer service is as excellent as you think it is. You might be surprised by the answers. So ask, listen and improve.
Final Thoughts
It’s far easier (and cheaper!) to retain a customer than get a new one. While everyone agrees that gaining new customers increases your company's profitability, losing customers is not something that you should ignore as a business owner. Avoidable customer churn is costing U.S. businesses $136 billion a year. You can lessen your losses with these five strategies for dealing with voluntary churn.
Logan Freedman, the content marketing manager at Gravy, has been a key leader in editorial and content marketing since 2014, being an expert on reducing customer churn, customer retention and SEO. He’s published in Rolling Stone, Newsweek and USA Today. To learn more about Gravy, visit GravySolutions.io.