Subscription-based services have become incredibly popular, and for good reason. The ease of signing up for a subscription makes it enticing to try out various offerings, be it streaming music and TV shows or having subscription boxes delivered to one’s home. Automated billing and payment systems also make subscription renewals incredibly simple, encouraging customers to stay for the long term.

If you find yourself struggling to keep your subscribers, though, your business might have a few holes that need patching up. In this article, we’ll discuss the concept of voluntary and involuntary customer churn, and what you need to know in order to prevent both of these from happening.

What is Voluntary Customer Churn? 

Voluntary customer churn occurs when one of your customers willingly and actively chooses to end their paid subscription to your service.  

There are different factors that could cause subscribers to cancel their payments. It could be due to a change in the subscriber’s financial situation, which may mean that they have found a more affordable alternative or simply decided to do without the service entirely. Another reason could be an ineffective onboarding strategy. Getting a customer to sign up is only the first step of the process. If the customer gets lost simply trying to use your offering, then it’s highly likely that they’ll abandon it altogether. However, one of the biggest reasons for voluntary customer churn is bad customer service. If you cannot resolve customers’ issues, leave inquiries unanswered, or—worst of all—respond to customers unprofessionally, then your subscribers will most likely take their business elsewhere. 

It’s best to use subscription billing software to observe customer behaviors and find out exactly what’s causing them to leave. However, while many businesses focus most of their energy on preventing voluntary customer churn, they tend to overlook the customers who aren’t canceling their payments on purpose. In fact, these customers are usually completely unaware that their subscriptions have stopped at all.

 What Is Involuntary Customer Churn? 

In more technical terms, involuntary customer churn occurs when a customer “cancels” their subscription without taking any action to do so. There could be a number of reasons as to why a subscriber fails to renew their subscription, the most common being outdated payment information. While most customers are happy to keep paying for high-quality service, nothing is more frustrating than finding out they’ve suddenly lost access to a crucial service without any warning. If subscribers feel like companies aren’t looking out for them, they may become tempted to find better service elsewhere. 

Thus, it’s important to deploy pre-emptive measures to ensure that your users can avoid accidental subscription cancellations. One way to do so is to send reminders to customers whose debit or credit cards are close to expiring. This will give them enough time to update their payment information before they are billed for service renewal. This also positions your company’s efforts in the customer’s best interest. You can also use a subscription billing solution, such as Vindicia’s recurring payment platform, that can automatically retry failed payment transactions, thereby reducing involuntary churn by as much two to three percent. 

Though customer acquisition and retention are indeed important for sales, it is equally as important to focus on customer attrition and coming up with solutions to prevent it. If left unchecked, active cancellations and passive churn could create a massive dent in your company’s revenue. Thus, it is imperative for businesses to ensure that every aspect of the customer experience is ironed out in order to retain their subscribers. Whether it means investing in better talent or implementing more effective software, these efforts will secure customer loyalty for years to come.