One downside of technological progress is the possible increase in churn rate (or service cancellation rate, also translated as customer churn) for many companies. This usually happens for two basic reasons:
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Because so much information is available online, it’s not always necessary to subscribe to a specific service in order to receive that information;
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When we talk about mobile apps, limited smartphone storage can be a deciding factor when a consumer chooses to unsubscribe from a service that necessarily consumes space.
In addition to these reasons for churn rate increase, there’s also the lack of understanding of end-customer needs. People may subscribe expecting one thing and receive something completely different. In that case, there are issues in the marketing strategies used to sell the service and also in persona design, which should represent the brand’s consumers.
However, there’s light at the end of the tunnel: mobile apps can drastically reduce your company’s churn rate numbers through precise development, a storage footprint that is economically viable, and content that truly interests your end customer.
How an app can reduce churn
Apparently, there’s no magic formula to maintain a solid subscriber base for a digital product or service. Based on what we researched, the trio mentioned above is what will define whether a company’s churn rate increases or decreases.
When developing an app, think especially about the interface: it must be crystal clear to users, without unnecessary frills or features that make their lives harder. Remember: the primary function of an app is to make life easier, not the opposite.
When making it available (paid or free), reinforce that it doesn’t take up much storage (if that’s true). Otherwise, the customer may believe that by removing your app from their phone, they’ll have much more space to install something else.
Be careful not to develop something that truly strains a customer’s memory usage or slows down the device, because that can create emotional wear you don’t want associated with your company. Imagine everyone saying installing your app is a bad idea.
Also make sure there’s interesting and relevant content inside the app so people have reasons to subscribe. Many times, before developing, we need to reflect on whether an app is truly the solution we need. After all, Apple’s and Google’s app stores are full of apps for every taste, budget, and need.
If you’re really going to build an app for your market niche, make sure it has good reasons to be downloaded, and that it works end-to-end.
Pay attention to the first sale
A common problem for companies with high churn rates is poor sensitivity in post-sale. Some people believe the big win is getting the app downloaded, when in fact it only matters if it’s actually used.
That’s why, before chasing new people to download your app, it’s essential to focus on keeping the customers who already bet on your service. Giving them countless reasons to stay is what enables a long-lived digital product for your company.
It’s an illusion to think no one will ever unsubscribe from your service, but it’s also wrong to think small rates don’t matter. If you have 100 customers at the beginning of the year and a churn rate of 2% per month, you’ll reach December with 78 customers, which means losing almost one-third of your original base.
Don’t be seduced by the siren song of new customers: yes, keep growing your base, but remember it’s easier to retain someone who already knows you than someone who just arrived.
Want to develop apps that will significantly reduce your business churn rates? Talk to X-Apps! We build software that delights customers, makes life easier, and stays for a long time on the mobile devices of those who subscribe…
