Building a Subscription Ecommerce Business That Addresses Churn From the Ground Up: Get Good-Fit Subscribers In From The Beginning

This is our first article in a three-part series on addressing the root causes of churn. Check out the second and third parts to learn about making your business churn-resistant.

It’s a fundamental fact that long-term sustainability wins out over short-term wins. Subscribers who renew over and over are exponentially more valuable than subscribers who cancel after the first month. 

How do you get these kinds of subscribers? By focusing on the people who fit your brand the best instead of using cheap tactics that appeal to everyone. 

In a Subscription Ecommerce Live session, we spoke with Joelle Goldman, co-founder of Churn Buster, a SaaS company that helps subscription ecommerce brands reduce churn by recovering failed payments. During our chat, Joelle explained the importance of finding customers who fit your brand and how to go about it.  

What is a Good-fit Subscriber?

Good-fit subscribers are subscribers whose needs align with your products and services. They aren’t just willing to buy. They genuinely love your products, are happy to subscribe, and often refer you to their friends and family. 

If you have several good-fit subscribers, your churn will be low because they genuinely want your products. Low churn means higher lifetime value and lower customer acquisition cost. 

“If you’re bringing in people from the beginning that are a good fit for what you’re offering, all of this becomes easier,” Joelle told us. “If you’re bringing in anyone who will click the button, you’re going to be putting out fires left and right. You’re not going to know what’s working and what's not. You’re going to be comparing a good-fit customer to a bad-fit customer, and they’re going to do completely different things at every step, and you’re not going to know why.”

Good-fit subscribers are subscribers whose needs align with your products and services.

Joelle gave us a great real-life example of this during our conversation. She told us about two companies in the same vertical with the same customer and churn recovery process. Company A recovered 17%, but B recovered 80%.

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What was the difference? Company A used aggressive promotions and free products to put people in subscriptions. A lot of people signed up to get the free product, weren’t aware it was a subscription, and canceled at renewal time. Some of them simply realized the product wasn’t for them after all. 

On the other hand, company B put a lot of focus on finding good-fit people. They had a mission and developed a community around the product. People loved it and kept their subscriptions active because they wanted to be there in the first place. They were good-fit customers.

Ultimately, Company B’s revenue was far more impressive because they kept the acquired customers. 

How to Find and Acquire Good-Fit Customers

“Tackling active churn is difficult and you can’t do it overnight,” Joelle said. “It requires a deep look at your business and the ways you approach everything from acquisition to the customer experience to the quality of your product to the quality of your service to who your competition is. It’s really all-encompassing.”

The first step to fighting active churn is finding your good-fit customers. This process isn’t the same for every subscription brand, but it goes like this:

Step 1. Determine What “Right Fits” Means For You

Your first step is to determine what a good-fit subscriber looks like for your business. What do they want and need? What problems do they have? What kinds of solutions do they expect? How do they make decisions? What triggers them to purchase to solve those problems?

Establish criteria for the type of person you can help the most. Then explain why your product is better than your competitors for this subscriber. This statement can be the basis of your value proposition.

It’s okay to have multiple segments of good-fit customers. But make sure each segment has problems and needs that align with the products you sell and the value you can provide. 

Step 2. Create a Message Map

A message map is a document that gives an overview of how your company should position your products and communicate with your subscribers. It ensures you have consistent messaging across the entire experience.

Establish criteria for the type of person you can help the most. Then explain why your product is better than your competitors for this subscriber. This statement can be the basis of your value proposition.

A message map usually includes headlines, key points, benefits, examples, use cases, customer quotes, and supporting details of your brand (or individual products). You should tailor all of this information to your good-fit segment. 

Share this document with everyone in your company so everyone is on the same page. Refer to it whenever you create web, email, or SMS content so all communications are consistent.

If you craft the content of your message map well, it will resonate with your good-fit subscribers. When they see your ads and read your website copy, they’ll know you’re perfect for them.

Step 3. Develop an Acquisition Plan

Next, create a plan to find and market to those good-fit subscribers. The trick here is to cast a net that isn’t too wide. 

Remember company A from our chat with Joelle? That's what they did. They gobbled up anyone who would click the "subscribe" button, regardless of whether they would stick around past the first renewal. The result was a lot of wasted time and money on promotions and free products that failed to create long-term subscribers. 

Your acquisition plan should target your good-fit customers specifically. Don't spend your energy on people outside of this group.

For example, if your good-fit subscribers are women in their 50s, don’t waste money putting ads in front of all women. Drill down so you’re only spending your resources on the people who fit your products perfectly. (This is key to keeping your acquisition cost low.)

Your acquisition plan should target your good-fit customers specifically. Don't spend your energy on people outside of this group.

When you reach out to those good-fit customers, use your message map to ensure you’re saying the right things to make them feel understood and valued. 

Step 4. Screen Your Customers

You can't force bad-fit customers to become good-fit customers. If someone doesn’t fit your brand, there’s a good chance they’ll unsubscribe after the first month.

Depending on your customer acquisition cost, subscribers who churn quickly could cost you money. In this case, it might make sense to avoid selling to customers unless they fit your brand perfectly. (That said, if your CAC is low, you can take more risk.)

Use clever marketing automation to qualify customers. Don’t push them to subscribe until you’ve identified that they meet the criteria for a good-fit customer you established earlier. 

You can't force bad-fit customers to become good-fit customers. If someone doesn’t fit your brand, there’s a good chance they’ll unsubscribe after the first month.

For instance, you might tag customers based on their site behavior or engagement with your email flows. Then you would recommend subscription products once they achieve a specific collection of tags.

Step 5. Create a Customer-centric Culture

The final step is the hardest but the most important. If you want to find good-fit customers, you have to place your customers at the center of your business. 

Remember, you aren't selling them products. You're solving their problems.

Support your customers in any way you can. Send them valuable information to help them achieve their goals, even if it provides no direct revenue. Make yourself available to give advice and feedback. Create lots of interactions and touchpoints that create positive experiences with your brand.

Most importantly, make the subscriber experience effortlessly simple. Getting their problems solved shouldn’t be complicated. Give them tools to adjust their subscription at any time without canceling.

Pro tip: ARPU gives you all the tools to make the subscription experience easy for your subscribers. Your subscribers can delay their next shipment, buy 1-time and subscription upsells, send gifts to friends, and swap products without logging into their account portal. 

Finding Good-Fit Subscribers Takes Time

It takes time to grow your business when you focus on good-fit subscribers, especially in the beginning, as you identify those people and how to reach them. 

“This may mean growing slower for some people. If we’re talking retention, you’ll have to go slower to build those fundamentals,” Joelle said. “Brand loyalty is becoming everything, and it’s not going to get cheaper to acquire people. Competition is not going anywhere.”

Over time, however, a customer base of good-fit subscribers will keep your churn and acquisition costs low while keeping your lifetime value high. You’ll spend your marketing resources efficiently and soon outpace your competitors.