Developing strategies to fight against churn and boost value of your subscription offerings


Is my product compelling no matter the tier or no matter the plan that someone signs up with? How can I fight customer churn by adding more value to my subscription business? 

These are some of the questions tackled in an insightful episode of Bold Commerce’s Own Your Commerce podcast, hosted by co-founder Jay Myers. In this episode, ProfitWell CEO Patrick Campbell analyzes what subscription firms can do to manage churn, and why he favors value stacking as a solid strategy to retain more members.

Solutions to reverse churn rates

As CEO of ProfitWell, which creates revenue automation products for subscription brands, Campbell works with many recognizable brands such as LogMeIn, Masterclass, Autodesk and Canva, giving him deep experience in what makes or breaks a subscription business.

Churn has long been the thorn in many CEOs’ sides, he says. And as a Bold blog post broke down, churn rates are an essential metric for subscription brands to track. Why? 

  • Recurring revenue is the lifeblood of subscription businesses.
  • Without predictable revenue it’s difficult to sustain a business and forecast growth.
  • Customer acquisition costs are only going up making it cheaper to retain customers than acquire new ones.

“The problem there is that you can't create new customers and that number's always going to be bad and there's never going to be over 100%,” Campbell notes in the episode. “What I think is more important is that I want to look at the different stages of my revenue churn.”

Brand managers should track if customers leave after the first or second month, but also they should look at the data in the months after the second month, “and then there's like the long tail when people seem to be a customer for the long term,” he says. 

“When I look at those three stages, there are different things that I would do to optimize those different stages. I might decide if I’m Blue Apron to say ‘Hey, that first stage there's nothing we can do because we're just sending tons of maybe not so qualified leads who are signing up for this promotion so that's not our path of best leverage.’”

Campbell advises subscription brands to never neglect a key factor in churn: it's all about relationships. “When that person comes in, a lot of times especially in the world of D2C, we're only thinking about that person starting the relationship. We're not doing nearly enough on the tail end…. It's building that relationship and then ultimately it's monetizing that relationship. I think the big thing that you have to think about is when that relationship is ended by the customer, they're doing this evaluation every month or every term, or maybe mid-term depending on the relationship you have with them, where they're looking at like ‘Hey are we still using that thing, hey are we getting value from it?’”

Value stacking is a smart strategy

Your price is the exchange rate on the value that you're providing, so you're saying it's this much value, and here's the price, Campbell says. For subscription brands, they have to ensure members continue to find the service and products compelling, otherwise they’ll churn out and seek quality products elsewhere. 

He goes on to explain that busines are selling an item, but also selling everything around it. “If you increase the number of things that increase the value, if you increase the quality that increases the value, all of a sudden value goes up,” he says, citing the example of meat-delivery service Butcher Box that offers some of its new members a year’s worth of free bacon.

Discounts won’t cut it, either. Campbell says it’s more advantageous for brands to complement orders with items from their inventory, which will tell shoppers they are getting more value for their purchases rather than getting 10% off their first buy. 

Stacking value on products can be more appealing to customers than offering discounts, Campbell says.  “Being a little bit creative and doing something can cost the same and people will spread the word, they'll post it on Instagram, and they'll talk about it. But no one's going to go raving to all their friends about saving five percent,” he adds.

Why pricing high makes sense

When asked about his opinion on how to price your subscription offerings, Campbell was quick to dish out his take: first go high, then potentially scale back. “I always like to start high because I want to see the people who truly have the propensity to buy the product and are truly into the product. Then I could skim down in the market and decide where my floor is going to be,” he says.

When pricing begins at a low tier, customers may wonder if that lower fee will mean poorer quality, which goes back to the kind of messaging you want to impart to your audience, he says. 

“The thing [brands] got to think about is that your price is a reflection of your value and your brand and I think it's easier to start high, get those right customers and then eventually come down; it's a lot harder to expand up.”

Want to keep the conversation going? 

Tune into the full episode for an engaging discussion on customer churn within the subscriptions space, ways to keep that monthly recurring revenue chugging along smoothly, and more advice around pricing, all shared by ProfitWell CEO Patrick Campbell. 


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David Silverberg

Written by David Silverberg

David Silverberg is a freelance journalist and editor who writes for news outlets such as BBC News, The Washington Post, Business Insider and The Toronto Star.

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