Jump to content

Customer Retention post Lockdown: Stopping the Subscription Box Churn

The popularity of subscription box services rocketed over lockdown.

As people were unable to shop in person, subscription products became a new way to access new and exciting products without leaving the home. The subscription box industry really boomed and is forecast to reach $478.2 in value by 2025, representing massive growth from just $13.2 billion in 2018.

There is an immense convenience to subscription box business models for both the retailer and the customer. Not only are boxes exciting and convenient to receive, but they also allow customers to stay stocked up on the latest and greatest products you have to offer.

The month-to-month volatility of subscription box businesses remains an issue, and in the post-lockdown landscape, customer interest in subscription boxes could wane unless you take proactive action to prevent subscription box churn.

Customer Churn: The Stats

Customer churn is the voluntary or involuntary cancellation of a subscription box service. Some level of customer churn is inevitable, but leaving churn unattended will harm your bottom line and reduce your customer’s LTV.

  • McKinsey found that some 40% of subscribers cancel their subscriptions eventually, with a third cancelling within 3 months.
  • Recurly places the average churn rate at around 5% for B2C businesses.
  • Business2Community states a slightly higher average churn rate of between 6% and 8%.

In short, for every 100 subscribers you have, you’re likely to lose around 5 customers at least each month.

This firstly means that you’ll need to find new customers on an ongoing basis, and secondly, that customer retention is extremely important.

Here are 3 proven strategies to reduce subscription customer churn:

1. Keep Your Products Fresh and Consistent

One of the key issues with customer churn is failing to maintain consistency across each subscription product delivered to your customer. It’s especially important to follow up a promotion with a strong product the next month to prove the longevity of your service.

There’s little point in dropping introductory prices through the floor if your next subscription box fails to deliver on expectations.

Additionally, drop product teasers and keep customers enticed with future offerings. Whilst you might choose to release some details of future boxes to your customers, you can keep some products hidden.

2. Stay On-Trend

Trends are forever changing. Adapt your offerings to remain contemporary and up-to-date for your target audience. A big part of this is coming across as authoritative and knowledgeable on your offerings. Show that you’re in the loop - you connect with your customers and know what they want.

For example, if you’re providing a vegan-focussed subscription product then it’s absolutely crucial that emphasise why you selected your products, where they come from and why they’re absolutely trustworthy.

Keep the loop between your brands, products and customers energetic.

Subscription boxes are like storytelling - you need your customers to keep guessing at what happens next.

3. Be Astute With Your Expenditure

You’ll need to account for customer churn in your business model and finances.

Keep track of your subscription box expenditure using professional accountancy software. You’ll need to track customer churn and adapt your pricing strategy depending on how many customers churn month-on-month and post-promotion.

This will help you avoid situations where you capture new customers off the back of a promotion (that might even leave you at a loss) only for them to bounce the next month. You’ll need to measure these events and account for them in your cash flow models.

The month-to-month nature of subscription services requires diligent month-to-month accounting. Optimise your month-end accounting efforts to unlock additional value to pass on to customers the next month.


Accountancy Cloud works with businesses of all shapes and sizes ranging from startups to SMEs and CFOs. Check out our case studies to learn how we’ve helped businesses tune their cash flow forecasting, increase their profits and grow their businesses.

The #1 finance partner for eCommerce startups

  • 100% online
  • Finance support to meet all your accounting needs
  • 9 out of 10 customers recommend us
Let's talk