This article was first published on My Customer. Read the full article here, an excerpt copied below.
Churn tends to be the focal point of the subscription industry, and for good reason: It’s an obvious concern for recurring revenue businesses that might not recoup the cost of a customer acquisition until several months into a subscription. But a mad rush to reduce churn isn’t always the appropriate response.
Research by McKinsey & Co. suggests that almost 40% of e-commerce subscribers cancel their subscriptions. Churn rates are similar for other subscription services based around replenishment, curation, and special access. What’s more important than the rate itself, however, is when customers decide to pull the plug on a recurring purchase.”