Subscription Retention and Churn Mitigation
Thanks for having me back!
So many brands focus on driving new subscriptions because the data shows that subscriber LTV is much stronger than your standard one-time-purchase customer LTV.
What they don’t always understand is that by definition, customers that subscribe have already “committed” to your brand, but that sure as hell does not mean that your retention team can stand back and watch.
Let me walk you through my experience with Athletic Greens and show you what a great subscription and retention experience looks like.
Let’s dive in.
This week's newsie is brought to you by The Email Marketers, the outsourced email department for e-commerce brands between $2m - $40m in revenue.
A new iOS here, another Gmail update there… Navigating the world of email marketing can be a wild ride, particularly for teams juggling 1,000 other high-priority items.
“But isn’t email de-…” - slaps person - “No.”
The facts are Gmail alone has 1 billion monthly active users and they typically spend more than 6 hours in their inboxes every day. For reference, the average daily Facebook user only spends 41 minutes a day on the platform.
But, almost every single email account we see has not optimized their strategies, leaving money on the table in the channel where their customers are most active.
In a world where customer growth is stagnant, you can’t afford to lose 60-80% of your satisfied customers because they lost connection to your brand (Source: Forbes, 2019).
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“It's not about getting a sale today; it's about the repeat business tomorrow.”
If one brand understands that like no other, it’s Athletic Greens, also known as AG1. I recently ordered their all-in-one daily supplement powder based on my nutritionist's recommendation.
As an e-commerce marketer, I immediately fell in love with the brand experience. From their sleek website with minimal distractions and and almost Typeform-like ordering experience to their subscription offer that was so compelling that, as Alex Hormozi would say, I would have felt stupid saying no.
As you can see, a single-serving subscription I can cancel anytime is $79, versus a one-time purchase for $99.
The choice is clear. Sign me up!
For Athletic Greens, this is the first big win. Now, there's inherent friction to me discontinuing the use of their product because I have to go in and cancel a subscription vs. simply not ordering again.
But it gets even better.
I often talk about how the first email after the purchase is a brand’s opportunity to reduce uncertainty and begin the work of retention.
Your customer basically just gave a stranger on the internet money; make them feel good about that decision.
Affirm their choice, welcome them to a community (something bigger than just a product purchase), and update them about delivery to keep them excited and alleviate their anxiety.
According to former Athletic Green’s CEO, Adam Trouncer, they see things very similarly. Since the product is intended to be used and re-ordered every month, their whole business focuses on retention first and foremost.
This means that while many brands start considering retention when they notice someone hasn't made a purchase in, say, 30 days, Athletic Greens begins the moment an order is placed.
In his interview with the Minds of E-Commerce Podcast, Trouncer shares that their focus is to build a relationship from day one. This means not just sending the right messages pre-purchase but also focusing on increasing trust and building a stronger relationship post-purchase.
A prime example of this ethos is their unboxing experience, which is outstanding. While you can’t measure the direct impact of this activity, both Trouncer and I truly believe that this type of brand marketing has an effect on long-term retention (which is a fight I will continue to fight with many on Twitter).
But unfortunately for me, while I love everything about AG1s marketing, I couldn’t stand the taste. So, sadly I decided to cancel my subscription before the 30-day reorder date.
Now, this is where it gets good because Athletic Greens does something that is so simple yet most brands overlook.
When I canceled, they asked me why:
I selected: “I don’t like that taste” and carried on with my life, thinking this was likely for internal product development purposes.
At this point, AG1 knows three things:
They missed the chance to convert a one-time buyer with a CLV of $79 into, hypothetically, a one-year subscriber with a CLV of $948.
They invested considerably in acquiring me, including sending their fancy welcome package, which must have reduced margins on that first purchase considerably. They likely recoup their costs on subsequent orders.
The reason I unsubscribed is taste. Not money, not lack of benefits, not the amount of product.
So, they put me into a specific email funnel to address that issue, and I got this email the same day:
Listen, I know this isn’t rocket science. But as an email marketer who sees over 100 accounts a year, I can tell you 99% of brands DO NOT do this. It’s so simple, so effective, and so overlooked.
I did, in fact, try the new recipe, and it improved the taste. But here’s where I think AG1 excels at understanding its customer base even more.
In the interview with Adam Trouncer, he mentions how AG1 runs consistent customer interviews to truly understand their audience.
The biggest hurdle to getting AG1 to stick as a consistent daily habit is getting users to understand the true benefit of the product and to stick with it long enough to experience said benefit.
This is why their next emails all revolve around reminding the customer WHY they wanted to start taking AG1 in the first place. Even if the taste sucks.
Because let’s be real, I didn’t intend to take AG1 because I was hoping to discover a delicious breakfast shake. I decided to take AG1 because I wanted to do something good for my health, maybe even solve a specific issue.
I used to have a history teacher who said you have to repeat the same thing over and over, like a Tibetan prayer wheel, for a person to actually remember it.
That’s why one influencer post for your brand will never be as effective as 8-10. That’s why a customer needs 8 touchpoints to convert and why you will see me appear on this newsletter more than once.
And that is also why AG1 proceeded to send me several emails over the course of weeks, reminding me of the benefits to get me to resubscribe (or at least drink the powder I had at home).
They even sent me a text to start a two-way conversation to educate me further and hammer home the benefits.
Here’s a selection of emails I received after cancellation and why I love them.
Why I love this email: Reminding people of their WHY they started taking AG1.
Concrete examples of what the product can do for the customer based on the ingredients.
Using social proof across various use cases to help customers build a daily habit.
Why I love this email: Reminder of the AG1 ingredients and why you chose this product over others in the first place.
Why I love this email: AG1 knows that the hurdle for users to see results is that they don’t take it long enough. This is a great reminder (with strong social proof by Andrew Huberman) to keep going. Your own personal motivation in an email.
As you can see, the key to retention sometimes might be (not always!) reiterating the same information. Especially with products where there is no immediate gratification.
Remind customers WHY they ordered the product in the first place and how to overcome the hurdles that make them want to quit.
Your emails are a bit like their personal trainer in the gym. When the going gets tough, the emails motivate you through it.
Finally, I want to mention one last thing:
People often forget that email is not just a revenue-generating channel, but also a community-building tool and a feedback loop.
Once AG1 feels that they have truly lost you as a customer, they send you a survey to understand how they can improve their product formula.
The biggest key to AG1’s success, in my opinion, has been their heavy focus on understanding their customers through customer interviews and detailed segmentation/customer profile creation. This is just another extension of that same effort.
In summary, we have all heard the statistics about “it’s 8x cheaper to retain an existing customer than to acquire a new one,” and “increasing retention by 5% can increase profits by 25-95%,” etc.
Athletic Greens has done a fantastic job of showing us how to implement a retention strategy that begins the moment a customer clicks “order.”
At the same time, I have two key points for improvement.
Check in earlier: Instead of waiting for me to unsubscribe to get feedback, AG1 could have done a temperature check earlier.
For example, they could have sent a text message asking about my current experience with AG1:
“Hey, hitting hurdles taking AG1? What’s stopping you from your daily habit?
D) I’m actually loving it
Then address those hurdles with tips and tricks.
They already messaged me to send me more insights into the ingredients; they could have also sent a message giving me options around common things people struggle with to address these issues in a follow-up text.
I should have gotten the recipe they sent me after I hit unsubscribe way earlier.
Don’t completely forget the taste objection: While I love the focus on the true core value behind taking AG1, it sure could have helped to get more than one recipe.
I really want to like this drink. Help me do so!
What do you think? Anything they missed?
That’s it for this week!
Any topics you'd like to see me cover in the future?
Just shoot me a DM or an email!