Involuntary Churn Rates For Subscription Businesses
Subscriber retention is one of the most – if not the most – important facets of successful subscription businesses. Keeping subscribers satisfied with products and services is one thing – but what about involuntary churn, such as through failed payments and credit card declines? Recurly dives into its data to provide some benchmarks.
Overall, based on an analysis of 1,200 subscription businesses over a 4-month period, Recurly says that these businesses are at risk of losing an average of 7.2% of their subscribers each month due to involuntary churn.
The risk of involuntary churn is considerably higher among B2B (7.5%) than B2C (6.6%) subscription businesses, per the report. That’s an interesting result in light of previous data from Recurly, which had found (in 2015) that involuntary churn was a greater factor in churn rates for B2C than B2B businesses.
Involuntary churn rates – defined as the percentage of total subscribers that could be lost each month if decline management strategies aren’t used – also differ among industries. Consumer Services subscription businesses have the highest risk of involuntary churn, with 8.3% of subscribers at risk each month, followed by Media & Entertainment (7.6%) and SaaS (7.5%) businesses.
By comparison, Healthcare (5.6%) and OTT/SVOD (6.2%) businesses have lower rates of potential subscriber contraction due to involuntary churn. Read the rest at MarketingCharts.com.