Today’s Churn Is Not Yesterday’s Churn

At Philo, we’ve observed an intriguing trend: It’s not unusual for a quarter of our daily subscription activations to come from customers who have subscribed to our service before. 

This phenomenon challenges the traditional notion of churn, as it’s not remotely a permanent loss of customers. While average churn rates may be higher in today’s competitive landscape, we’ve also noticed a higher “resurrection velocity” referring to the volume of customers coming back for various reasons. This presents an opportunity for businesses to understand and cater to different types of churn in order to improve customer retention and maximize value. 

One key insight is that not all churn is created equal; different customers churn for different reasons and it’s crucial to identify these reasons and tailor mitigation strategies accordingly.

Financial churn 

These are customers who may unsubscribe during leaner times due to financial constraints. However, many still have strong loyalty toward your product and return when their financial situation improves. 

It is very easy to misdiagnose financial churners as lacking persistent value to the business. On the contrary, the fact that they keep coming back means your product is essential to them, given the scrutiny with which they prioritize their spending. Offering alternative billing choices, modified product tiers with lower pricing or temporary subscription pausing can help manage their expected behavior and retain them as customers. 

Competitive churn 

These customers may be lured away by promotional offers from your competitors or new entrants in the market. Rather than engaging in a race to the bottom with gimmicks, a well-timed and strategic approach to branding and marketing can help keep your service top of mind for these customers even after they leave. 

The challenge with this cohort is that they are difficult to proactively identify. As such, leveraging broad-based marketing channels such as brand advertising or low-investment CRM tactics can be effective in priming this cohort to return. It is particularly important to focus messaging on new products or features that make your company the new shiny object. 

Seasonal churn 

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