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Customer Retention Playbook: How Freshly Turns Cancellations into Cash | Subscription Show 2020

Learn more | Your subscribers don’t want to cancel—at least, not all of them. So how can you find out which subscribers have problems you can fix? And how can you solve their problems in the moment?

Meal delivery subscription Freshly has beaten back high customer churn by looking at the moment of cancel differently. Freshly product manager, Adrienne Bouchie, and Brightback co-founder and CEO, Guy Marion, dive into how they did it.

This presentation covers how Freshly retained over a million dollars in revenue as the pandemic transformed customer needs. Learn best practices for a successful churn deflection program that you can use for your business including:
- How to A/B test your current cancel process
- Running experiments to save more subscribers
- Identifying the subscriber groups most likely to be retained
- Analyzing performance based on LTV
- Identifying the ROI your business needs
- Planning for the future: Make retention a part of your roadmap

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Customer Retention Playbook: How Freshly Turns Cancellations into Cash | Subscription Show 2020

  1. 1. Customer Retention Playbook How Freshly TurnS Cancellations into Cash with Brightback #subscriptionshow
  2. 2. Guy Marion CEO & Co-founder Adrienne Bouchie
  3. 3. Ask us anything Hit the Q&A button to submit a question #SubscriptionShow @brightbackio @freshly
  4. 4. 5 Enter to win free subscription self-care from Brightback customers #subscriptionshow
  5. 5. 6 Agenda ● Overview: Managing Churn Online ● Retention-Led Growth at Freshly ● Six Steps to Creating Freshly’s High Performance Retention Flow ● Q&A #subscriptionshow
  6. 6. 7 How to manage digital subscriber churn at scale #subscriptionshow ● Brightback: digital retention leader ▪ Founded in SF (2018) ▪ SaaS-based retention & testing platform ▪ Serving E-Comm, Digital Subs, SaaS ● Key benefits of online churn deflection ▪ Save 10% - 30% of cancels and reduce CAC ▪ Testing agility without engineering lift ✔ Churn deflection ✔ Retained LTV ✔ Cancel reasons & benchmarks
  7. 7. 8 Retention-led growth at Freshly ● Freshly: the food delivery leader ▪ Founded in 2012 ▪ Shipping 1m meals / week ▪ Wide variety of customers ● Product Retention at Freshly ▪ Subscriber engagement Pod ▪ North Star KPIs ✔ Profitability ✔ Retention ✔ Cancel completion % #subscriptionshow
  8. 8. 9 How the Pandemic has impacted subscriber retention ● At the onset, new signups spiked ▪ Priority: fulfill demand ▪ Halted new user signups ▪ Retention skyrocketed ● Two groups of buyers emerged ▪ High intent to purchase ▪ High intent to cancel #subscriptionshow Freshly New User Sign Up: 3/8/2020 - 3/21/2020
  9. 9. 10 Pivoting retention strategy through the pandemic ● Pre-pandemic retention activities ▪ A/B test cancel flow ▪ Test new offers ▪ Map to LTV ▪ Generated significant lift ● What happened during the pandemic? ▪ Cancel completion and retention increased ▪ Although save rate decreased, the LTV of our retained customers increased significantly #subscriptionshow Save Rate Delta- March 2020
  10. 10. 6 Components of a High Performing Retention Program #subscriptionshow
  11. 11. 12 1. Goals for a multi-phase (3-6 month) pilot program ● Goal: Prove cancel flow performance by A/B testing in-house cancel flow vs. Brightback ● Goal: Optimize offer & page deflection via sequential, multivariate testing ▪ Phase 1 - Test five different offer categories ▪ Phase 2 – Test offer strengths within a category ▪ Phase 3 - Target offers to specific users ● High Level Learnings ▪ Low risk ability to rapidly test hypotheses ▪ Time to analyze and digest with team #subscriptionshow Cancel Completion Rate: Control vs Variant 1.2% *
  12. 12. 13 2. Assess overall flow performance via A/B testing #subscriptionshow ● Goal: determine lift ▪ Launched pre-Covid in Jan 2020 ▪ Key differences: personalization, dynamic offers, audience targeting ▪ Side by side funnels w/Brightback + Segment + Amplitude ● Key Learnings ▪ Pre-Covid ▪ Post-Covid ▪ The Winner Control: % who entered web flow > canceled Treatment: % entered cancel flow > saw targeted offer > canceled
  13. 13. 14 3. Determine highest performing offer categories (Phase 1) #subscriptionshow ● Goal: which offer categories are most effective for saving customers ▪ Randomized offer testing against a control ● Key Learnings ▪ Winning categories: Price & Flexibility ▪ Losing categories: Contact Us & Change Plan ● Next steps: ▪ Created multiple offers in each category ▪ Measure impact on cancel completion rate Control A B C D Categories
  14. 14. 15 4. Eliminate poor performers, then test multiple offers within the winning categories (Phase 2) When analyzing the success of phase 2, we had multiple variables to consider:  ▪ Offer acceptance rate ▪ Deflection rate ▪ Incremental revenue from accepted offer  #subscriptionshow Categories Strengths
  15. 15. 16 5. Target offers to specific users to maximize LTV Impact (Phase 3) Once we have identified the most successful offers blended across customers, next target them using customer attributes to entice the user and grow LTV: ● Lifecycle tenure ● Total spend ● Cancel reason Examples ● Lost Job: User loses their job, is a loyal customer, selects “It’s Personal or Financial” > help us through ● Student on vacation: wants to stop meal deliveries during break > pause over the summer. #subscriptionshow
  16. 16. 17 6. Establish the ROI of your customer saves program #subscriptionshow 1. Calculate Incremental Lift Find Avg Weekly Saved Customers - Cancel Completion Rate Decrease (1.2%) x Avg Number of Weekly Cancels = Avg Weekly Saved Customers Find Avg Weekly Additional Orders - Avg Weekly Saved Customers x Avg Additional Orders from Retained Customers = Avg Weekly Additional Orders Find Annual Incremental Revenue - Weekly Additional Orders * Avg Revenue per Order = Weekly Incremental revenue x 52 = Annual Incremental Revenue from Saved Customers ($>1 million) 2. Calculate Costs - Total Avg Monthly Sessions * Cost/Session = Total Monthly Cost * 12 = Total Annual Cost 3. Calculate ROI - (Annual Incremental Gain - Annual Cost) / Annual Cost = ROI of Retention Program
  17. 17. 18 So what comes next? ● Increase segmentation and personalization within our offers ● Develop automated winback campaigns ● Proactively engage with at risk customers through our churn prevention model #subscriptionshow The Future of Brightback & Retention at Freshly
  18. 18. 19 Key Takeaways ● Start small and test often ▪ A/B test your existing flow against a variant to validate the incremental lift ▪ Then expand to all platforms ● Identify which offers work best for your customers AND for your business ▪ Look at the whole picture of metrics, not just highest accepted offer ▪ These offers need to work for both groups, the customer and the business to drive retention ● Take time to run the analysis and continue to improve ▪ Compare testing phases ▪ Compare incremental revenue gained ▪ Iterate on your learnings #subscriptionshow
  19. 19. That’s all, folks! Thank you for your time! #subscriptionshow