Most subscription-based companies struggle to retain and maintain their membership base. Unlike the traditional one-time sale model, the subscription model relies on delivering month-to-month value to the subscribers and providing them member benefits. It is easier for customers to subscribe when the monthly charges are reasonable and deliver maximum value. This can guarantee a steady revenue stream by locking customers into repeat business.
Why Retention is Important for Subscription-Based Companies
Acquiring a new customer can cost around 5-7 times more than retaining an existing customer. Member retention is a key performance indicator for subscription-based businesses, especially those operating on a monthly model. With growing technological advancements, the subscription-based model is becoming ubiquitous.
Travel businesses like travel clubs that follow the subscription model typically charge their customers a monthly fee. As more customers join every month, the revenue keeps accumulating. The longer the customers subscribe, the more valuable they become. Therefore, to save on marketing costs, subscription-based companies focus more on member retention than acquiring new ones.
Evaluating Churn or Turnover Rates
Another key metric for growth is the subscriber or member churn or turnover rate. This helps in quantifying member retention because a lower churn rate corresponds to a higher retention rate. Customers may leave for many reasons, but research indicates that 9 out of 10 subscribers or members abandon a business due to a lack of customer support.
Therefore, companies should focus on brainstorming new strategies to reduce the churn or turnover rate and increase member retention. One way to do so is by improving the customer experience and practicing better customer management strategies to make them feel valued. Member retention is the foundation of the company’s growth and too many companies undervalue this metric.
How to Increase Member Retention
If your churn rate is going up, it means that you must double down on your efforts to improve customer satisfaction. Creating a loyal customer base results in more profits and a recurring stream of revenue.
Here are a few reasons to prioritize member retention over member acquisition and set the tone for sustained growth –
- Increase Customer Lifetime Value – Customer Lifetime Value (CLV) is the total revenue that a business gets from each customer in the entire period of the customer relationship. It is an important business metric that predicts the total money each customer is expected to spend (on average) with that business, product, or service. The main goal of subscription-based companies should be to maximize Customer Lifetime Value.
- Better Asset Utilization – When you focus on member retention, you will not be spending as much money on advertising and marketing campaigns. You can focus more of your resources towards supporting existing customers.
- Increased Return On Investment – Even a slight increase of 5% in customer retention can increase revenue by 25 to 95%. (Source) Therefore, member retention efforts have a positive impact on business growth and its overall ROI.
- More Sales –When your customers already love your products or services, it is easier to introduce new products and sell them as well. By focusing on upselling to your loyal customers, you can add more profitable sales and expand the CLV.
- Word-of-mouth Marketing – Word-of-mouth marketing is the best strategy for customer acquisition and retention. It is also completely free. It is easy to convert loyal customers into brand loyalists who spread the word on your company’s behalf. Additionally, you can ask for referrals from your most loyal customers. Better retention strategies will lead to more acquisitions.
- Valuable Feedback – Loyal customers are often open to giving valuable feedback and suggestions to improve your business. You can leverage customers’ ideas and implement their feedback to continually improve your business and position it for faster growth.
Six Ways to Increase Member Retention
The more customers you can retain, the faster you can achieve your business goals. Below are listed 6 often-missed but practical strategies to increase member retention for subscription-based companies –
- Smooth Onboarding Process – The first impression can make or break a deal. If customers have an initial positive experience with your brand, they are more likely to stick around for a long time. Therefore, take time to develop a seamless onboarding process. If possible, consider personalization to deliver at or beyond the customer’s expectations. To build an engaged community, it is important to deliver the quality of services they are expecting to receive.
- Personalized Offerings – Personalization is crucial for creating a loyal customer base and positive ROI. By understanding customer preferences, purchase history, and other relevant information, you can deliver personalized offerings tailored to each customer’s unique needs. You will need a Customer Relationship Management (CRM) system to fulfill personalized offerings.
- Improve the Customer Experience – Customer experience plays a huge role in member retention. Most customers leave businesses due to poor customer experiences. Improving customer experiences also cultivates loyalty. You can take feedback from dissatisfied customers through a survey as a part of the client retention strategy. Next, focus on implementing those suggestions to create a positive and meaningful customer experience.
- Reward Most Loyal Customers – If customers do not feel valued or appreciated, they will look for your replacement with a competitor. Therefore, it is important that you do not take customer loyalty for granted. Encourage your most loyal (VIP) customers by rewarding them at important intervals. You can send bonus gifts, upgrades, or value-added services to express your gratitude.
- Listen to Your Customers – It is important to actively listen to your customers and understand their experience. Customer service is the chance to make even the most dissatisfied customers feel better about the relationship. Make sure to use the right communication platforms that your customers prefer. This allows you to listen to them in the right way. You can also implement a chatbot on your website or address grievances through social media platforms. Over 89% of customers abandon the business after a horrible experience. Therefore, make it a point to proactively reach out to the customers and engage with them productively. Also, pay extra attention to inactive customers and gather feedback for areas of improvement.
- Notice the Churn Rate in Advance – The most obvious way to improve retention is by paying extra attention to the signs of churning or turnover in advance. These warning signs will help you strategize and take action to stop customers from leaving. Let us suppose that a customer has been inactive for 6 months and has not indicated any plans to make a purchase in the near future. You can use your research insight to send follow-up emails and find the reasons to prevent them from leaving.
Member Retention Strategies from iTravelDirect
iTravelDirect has been recognized as the world’s best white-label travel club builder. We help subscription and membership-based companies offer a customized and privately-branded travel club at affordable prices. Our travel club platform can be leveraged as a potential member retention strategy to increase revenue while also boosting member utilization, loyalty, and retention.
SoftCash Travel Rewards Strategy
A SoftCash travel rewards program utilizes travel as a motivator to reward high-value customers and engage them with exclusive travel rewards. Your business can purchase soft cash credits to reward and encourage your customers. These credits offer additional benefits to customers which can be used to claim trips, user fees, and other incentive-based needs. SoftCash is a great tool to enhance member retention and foster loyalty among your VIP customers. Customers can even check the rewards and real-time updates to see their earnings and redemption status.
Friends and Family Trackback Travel Rewards Strategy
A Friends and Family TrackBack travel rewards strategy is an easy-to-use reward tool that allows your members to share referral links with non-members and introduce them to exclusive discounts. This is a win-win situation for your business, as it will generate additional revenue while also increasing brand awareness among non-members. This ensures that you spent less time on the nitty-gritty of marketing strategies and focus on creating a brand reputation to generate a consistent revenue stream.
Travel Club Membership Benefits
iTravelDirect offers an array of benefits and customizable offerings for your members at the best price. Depending on your business size and requirements, you can offer benefits across various categories such as flights, hotels, car rentals, cruise bookings, and more.
You will be provided with a state-of-the-art booking engine that is equipped with the latest technology and a large travel inventory to offer real-time booking rates to the members. Members can also utilize value-added benefits and daily lifestyle discounts to offer a one-stop shop for all your member needs.
Here’s a quick list of some options you could provide:
- 24/7 personal assistant whenever they need it,
- Complimentary flight insurance,
- Access to private medical-jet services in case of a travel emergency,
- Fast access to visa and passport services.
- 24 x 7 roadside assistance,
- Multi-language support from all across the globe.
- Access to thousands of exclusive collections of tours and activities
This is just a small sampling of the type of benefits you could make available to your subscribers and members. All these benefits will ensure the utmost peace of mind during travel. But it doesn’t stop there. The superior subscriber and member support offered by iTravelDirect on your behalf ensures high member satisfaction and improved retention rates.