Trending in B2C and B2B, the subscription economy with monthly fees has taken over commerce. Certainly, that’s true whether it’s consumables for consumers or products for business.

Why? There’s an overwhelming on-demand appetite for convenience – access and efficiency.

ERP – enterprise resource planning – has made it possible. Software automates resources and reduces inventory costs.

It’s been a boon for business cash flow.

It’s cost effective for consumers and business alike because commerce takes place even though businesses don’t necessarily have to own resources to make money.

So, subscription models have been a catalyst for structural changes in business operations.

However, many companies are experiencing losses from churning in subscriptions. This, of course, means companies can lose mega revenue because they’re not keeping subscription customers.


There’s a myriad of reasons, such as customers changing their minds, forgetting to update their payment information, or the companies themselves are mismanaging their subscription models.

Obviously, it’s impossible to eliminate churn but it’s possible to minimize it.

Here are some solutions:

Encourage prepayments

While enjoyed by consumers, the problem with month-to-month options is that it’s often disruptive for company cash flow.

A possible solution is to offer a discount and even some added value as incentives for payments in advance. This enhances cash flow.

Automate polite dunning

Dunning is the company’s communication with overdue accounts. Sometimes, customers actually want to remain as subscribers and have not updated credit card information.

So, in the case of involuntary cancelations, businesses can use light humor to remind customers to update their information. The reminder should include a platform for them to immediately and securely pay.

Query subscribers who voluntarily cancel

For voluntary cancellations, companies can politely ask their customers why? Perhaps the customers can be satiated.

Plus, the company can gain valuable insights to alleviate the undesirable cancellation trend. This can be accomplished with surveys.

Surveys can help businesses spot a trend in the reasoning explained by customers. Perhaps some changes can be made to solve the issue.

Institute a skip and pause strategy

Unforeseen developments might be a reason why customers cancel or opt out. It might be a budget reason or it might be that a competitor has attracted the customer away, or it might be the customer simply dislikes a too-rigid subscription plan.

It’s much easier to keep a customer happy than trying to regain the customer after having made a decision to permanently leave.

Therefore, a solution might be to permit subscribers to skip or pause a month. Publishing such a policy actually helps to encourage signups. Customers often appreciate the ability to buy without being pressured to commit long term.

Reward loyal customers

Customers appreciate being treated well for their loyalty. Loyalty programs are a necessity in this economy.

Very importantly, loyalty programs need to progress or evolve as rewards over the lifetime of the business-customer relationships.

Companies can leverage loyalty programs to gain insights about customers, especially by offering incentives to sign up for apps. Apps help businesses learn valuable information about customers and encourage longtime business relationships.

Again, with sustainability, companies enjoy a positive cash flow and higher profits when they’re able to satisfy their customers long term.

From the Coach’s Corner, here are relevant articles:

Energize Your Customer-Loyalty Program in 6 Steps – The quickest way for established businesses to optimize revenue is to have a stellar customer-loyalty program — there are six steps you can take for repeat sales and referrals.

Strategies for Maximum Customer Loyalty, Profits – Customer retention is important for profits in good times and bad. Here’s what to do.

Why Your Customer-Loyalty Program Might Not Be Profitable – Researchers are warning businesses that their customer-loyalty programs, which are designed to increase repeat business, may be causing more harm than good.

Best Sales Pipeline Tips: Content Marketing, Follow-up and Marketing Automation – Here’s how you can maximize your sales pipeline with effective content marketing, prioritizing follow-up and marketing automation.

CRM – Boost Sales with Behavioral Marketing – To increase your profit margins with customer relationship management, consider leveraging the principles of behavioral marketing and behavioral segmentation. Behavioral segmentation can increase loyalty by segmenting your marketplace audience.

“Good customer service costs less than bad customer service.”

-Sally Gronow


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.