5 Steps to Creating a Customer-Centric Strategy for Your Subscription-Based Business
11 mins readApr 26, 2022
Running a subscription-based business is a lot of work. You have to make sure that you are providing a great customer experience, while also keeping your churn rates low. It can be tough to do it all on your own, which is why we put together this five-step guide to creating a customer-centric strategy for your subscription-based business!
What is Customer Centricity?
Customer centricity is the practice of putting the customer at the center of your business. This means that you are making decisions based on what is best for the customer, rather than what is best for you or your company. When done correctly, this can lead to increased profits and higher customer satisfaction rates.
Why You Need a Customer-Centric Strategy
If you want your subscription-based business to be successful, you need to have a customer-centric strategy in place. Churn rates will be high if customers do not feel like they are the focus of your business. In order to create a successful strategy, you need to understand what it means to be customer-centric and learn how to apply it to your business.
The Five Steps to Creating a Customer-Centric Strategy
Now that you understand what customer centricity is and why you need it, let’s take a look at the five steps you need to follow to create a customer-centric strategy for your subscription-based business.
Step One: Figure Out Your Churn Rate
Before you can start doing anything, you need to figure out your churn rate.
Churn rate is the measure of how many customers or subscribers cancel their service with a company over a given period of time. A high churn rate can be indicative of poor customer satisfaction, and it can have a negative impact on a company’s revenue.
To calculate churn rate, divide the number of customers who cancel their service in a given period by the total number of customers at the beginning of that period.
For example, if a company has 1,000 customers at the beginning of a month and 100 of them cancel their service during that month, the company’s churn rate for that month would be 10%. Churn rate is sometimes also referred to as “attrition rate” or “cancellation rate.”
Step Two: Identify Your Most Important Customers
Once you know your churn rate, you need to start figuring out who your most important customers are. These are the ones who are most likely to stick around, so you need to make sure that you are providing them with a great experience.
Your Most Important Customers (MVCs) are the cornerstone of your business. They are the ones that generate the most revenue and profit for your company. Identifying them is crucial to your success.
Creating customer personas helps you better understand your target market and figure out how to reach them. It also allows you to create marketing messages that resonates with them. Knowing your MVCs is the key to driving more sales and profits for your business.
There are a few different ways to identify your MVCs. One way is to look at your Customer Lifetime Value (CLV). This metric tells you how much revenue a customer will generate over the course of their relationship with your company.
Another way to identify your MVCs is to look at your Net Promoter Score (NPS). This metric measures how likely it is that your customers will recommend your products or services to others.
You can also use customer segmentation to identify your MVCs. This involves grouping your customers together based on shared characteristics. Once you have segments, you can compare them to see which ones generate the most revenue and profit for your business.
No matter what method you use, it’s important to identify your MVCs and figure out how to keep them happy. By doing so, you’ll be able to drive more sales and profits for your business.
Step Three: Create a Customer-Centric Strategy
Once you know who your Most Valuable Customers (MVCs) are, you need to create a strategy that is focused on them. This means creating policies and procedures that will ensure that they have a great experience with your company.
It also means making sure that you are always putting the customer first.
There are a few key things that you can do to make sure that your strategy is customer-centric:
- Know your customer’s needs: You need to understand what your customer’s needs are and what they value most. This will help you tailor your offering to them.
Design around the customer: Make sure that your pricing plans and offerings are designed around what will work best for your customers. This includes giving them options and Tailoring your service to their needs.
Build a customer success team: A customer success team is focused on ensuring customers are successful with your product. They proactively reach out to customers, help them with any problems they are having, and make sure they are getting the most out of your product.
Make it easy for customers to give feedback: It is important to make it easy for customers to give you feedback. This way you can take action on that feedback and improve your customer’s experience.
Keep a close eye on your churn rate: Your churn rate will give you a good indication of the health of your customer base. If you see a high churn rate, it means that you need to take action to improve the experience of your customers.
Step Four: Implement the Strategy
Now it’s time to put your customer-centric strategy into action. This means making sure that all of your employees are on board with the plan and that you are consistently providing a great experience to your customers.
Step Five: Evaluate and Adjust
The final step is to constantly evaluate your customer-centric strategy. This means looking at your churn rate and making sure that it is going down. If it isn’t, then you need to make some adjustments to your strategy.
By following these steps, you can create a customer-centric strategy for your subscription-based business! This will help you reduce churn and ensure that your customers have a great experience with your company.
If you’re not sure where to start, we can help. Churn reduction is essential for the success of any subscription-based business, so don’t wait to get started on this important task!
Using Customer Feedback to Reduce Churn
Churnfree allows companies to create retention flows and build customizable cancel options and actions for your website to improve customer LTV and reduce churn.
SaaS companies should focus on reducing churn rates and designing retention flows to keep customers engaged. By giving customers the ability to customize their cancellation experience, you can improve customer LTV and reduce churn.
What are some of the reasons customers cancel their subscription?
There could be a number of reasons why customers might want to cancel their subscription. Maybe they’re not using the product as much as they thought they would, or maybe they’re simply dissatisfied with the product. Whatever the reason, it’s important to give customers the option to cancel their subscription and provide them with clear instructions on how to do so.
How can you improve customer LTV?
Churnfree can help SaaS businesses improve their customer LTV by incorporating a retention experience. For example, if a customer decides to stop using your service, using Churnfree’s retention flows, you can offer different offers to them so that they keep using your product. It will also give a customer to leave their feedback, which will help companies to bring improvements in their products and add more features.
What are some of the best practices for reducing churn?
There are a few key things you can do to reduce churn:
- Communicate clearly with customers about why they’re cancelling and what will happen after they cancel
- Give customers the option to provide feedback about their cancellation experience
- Follow up with customers after they cancel to see if there’s anything you can do to win them back
By using Churnfree, companies can define the retention strategy, so their users stick to the system and don’t cancel the subscription. This help the SaaS companies to learn more about user feedback and will help them understand what are the main reasons customer wants to stop using the service.
Sign up for our platform and start building your own customizable retention flows in minutes. With our help, you’ll be able to keep your customers happy and your business thriving!