Customer retention

4 Steps to Craft an Effective Cancellation Flow

July 6, 2022

If you had the chance to see detailed quantitative data about why you’re losing subscribers, you’d want to see it, right? That kind of insight from a cancellation flow is invaluable for subscription-based companies fighting for every lead and conversion.

Once you’ve gone to the expense to acquire a customer, you don’t want to lose them – especially when it costs 7 times more to replace them.  

A simple solution exists in the unlikeliest of places: your cancellation flow. This post explains how this flow works and how you can use it to make data-driven product, pricing, and marketing decisions.

What’s a cancellation flow and how does it work?

Customers cancel their subscriptions for a range of reasons, only some of which are under your control. If you want to reduce churn, you need to: 

  • Ask customers why they’re leaving  

  • Identify what’s under your control

  • Address the issues that cause the highest customer churn

That’s oversimplified, of course, but this doesn’t need to be complicated. Platforms like ProsperStack can help you quickly craft and embed an effective cancellation flow directly into your product – with minimal development time. In our case, by integrating with the most popular billing platforms. 

The result is an automated customer cancellation flow (or churn management solution). Over time, this approach helps you reduce churn, grow LTV and maximize your ROI – with just a few lines of code.  

How do I craft a cancellation flow?

Before we dig in, let’s define our purpose: gaining clarity on why your customers are leaving, identifying what you can control, and partnering with internal teams to fix it.

Some of what you learn might surprise you. Maybe even sting a little. But learning where you can improve your customers' experiences will ultimately help you remain profitable.

Step #1: Design your flow to achieve your goals

We can help you craft a thoughtful cancellation experience designed around best practices. You can mix and max our reusable components to create a unique experience for your product. Or customize components, usually without a developer. Our tool makes it easy to respond quickly and customize questions based on your needs. 

User Tip: Involve your product, marketing and customer success teams, so you’re strategically deploying your resources rather than having internal teams competing for them. The data will make your next steps clear.

Step #2: Embed your form into your cancellation experience

You're ready to collect customer feedback and identify your most significant opportunities. The ProsperStack cancellation flow seamlessly integrates with these payment processors:

When customers launch your cancellation sequence, they’ll receive a brief survey about why they want to leave.

User Tip: In our experience, it’s best to limit your form to about six questions (which you can customize at any time).

Step #3: Prevent cancellation with strategic offers

Your flow will automatically present coupons or other incentives based on customer survey responses or segmentation criteria. For example, you could:

  • Apply coupons

  • Extend trials

  • Change plans

  • Pause subscriptions

  • Create a seasonal offer with custom development

User Tip: Create sophisticated rules and deliver highly persuasive offers tailored to a customer’s survey responses. For example, if a customer says they’re canceling due to price, you can respond with an offer to save 25% for six months.

Step #4: Analyze what’s working and double down

 Once you have a foundation, you can customize freely based on what you learn or what’s working well for you. Even small gains here can have a considerable impact. For example, increasing customer retention by only 5% can increase profits anywhere from 25-95%. 

User Tip: Put different offers head-to-head with A/B testing to see what performs best.

Building your cancellation flow: Let’s get started

Building a thriving subscription business is challenging. And when you’re focused on your product and the marketplace, there’s not much time left for customer offboarding – critical as it is.

Could you build an effective cancellation flow in-house? Perhaps. But do you have the time, talent and resources to invest in that? And do you want to take your team’s attention away from your product roadmap? 

You can have a ProsperStack-hosted cancellation flow live within a few hours — retaining customers, reducing churn, and growing revenue. Many, many companies just like yours already have. Learn more or get a free demo.  

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