by If you want to make 2024 your best year so far, I highly recommend starting with a strong January…
The most successful years I have ever experienced in BusterBox have always started with a strong January…
Now, a lot of people think January is a complete write-off for Subscription Businesses (and I understand why)
People come back after spending a fortune at Christmas and suddenly decide that they need to sort out their finances by cancelling all of their subscriptions.
Churn can be a bit higher in January, but that doesn’t mean you need to write off the entire month.
You can do plenty of things to start the year as strong as possible and give yourself a platform to build on to achieve lots of success in the following months.
In this article, I am going to break down what you can do to have the best January possible and set your business up for a great 2024.
Churn
Every subscription box owner hates churn. If we never had to deal with churn, we would be able to create massive wealth quickly without much effort.
Unfortunately, It does exist and is just part of the game.
Now, as I mentioned above, Churn can be higher in January. (Some niches notice it more than others) But there are things you can do that will help a lot.
Let’s go through them.
1. Be flexible with payment terms.
A big part of the reason why churn is higher in January is that people simply don’t have the money to pay you.
A lot of people live paycheck to paycheck and have spent more than normal over the Christmas break and now don’t have enough to pay for non-essential items like a subscription box.
The solution to this is very simple.
You should be very flexible with your payment terms and allow your subscribers to skip a month if they want.
It sounds very obvious, but a lot of brands don’t do this.
They literally give the choice of paying now or cancelling. (and if the customer has no money, well, you are pretty much forcing them to cancel)
I know it can be annoying allowing somebody to skip if they have just signed up for a 6 or 12-month commitment (especially on an offer), but it is better they do that instead of cancelling.
2. Have an effective save process in place.
At this stage, you should have a firm understanding of what is driving up the majority of your churn (if you don’t know, check your cancellation reasons over the last 12 months)
You should then use that data to come up with solutions to solve those problems and save more customers.
I will give you examples.
In BusterBox, one of the main drivers of churn was dogs destroying toys too quickly.
Some customers get really angry when this happens as they feel the service isn’t good value for money.
So, we came up with a simple solution.
If somebody wants to cancel because of this, we will give them the opportunity to switch to tougher toys.
This has made a massive impact on our overall churn and has helped reduce it a lot.
We simply provided a solution for a big churn driver, and now that churn is tiny compared to before.
My guess is there are probably a couple of big drivers in your business, and if you come up with solutions that work for you and your customers, your retention will improve significantly.
You should be doing this all year round, not just in January, but now is a very good time to double down on this because it will have a big impact to healthy and profitability of your company.
3. Have processes in place to fight passive churn.
There are two different kinds of churn in any subscription business.
1. Active Churn
This is the kind of churn you are probably most aware of. This is when the customer decides to cancel the subscription because they don’t want it anymore (this could be down to many factors)
2. Passive Churn
Most passive churn is caused by issues with the customer’s payment method. E.G., You try to bill the customer, and the card gets declined.
This could be down to a number of different factors. E.G., the customer got a new card, changed the bank account, lost their card, or stopped getting paid into a particular account, etc…
The difference between active and passive churn is with passive churn; there is a high probability the customer actually wants to continue the subscription.
(They just can’t be bothered or don’t know how actually to update the card)
The secret to solving this kind of churn is to make the process of updating the card extremely simple for the customer.
I have a full blog article on this and have posted about it in the group before, so search for a detailed breakdown on this.
But I will cover it again briefly here.
1. Make sure you have a dunning sequence set up.
2. If possible, have it so the customer only has to click once to update the card. (no passwords or complicated navigation)
3. Try the customer multiple times over at least 50 days (use smart retries if possible)
4. Send a personal email to the customer asking if they need help updating their card.
5. Consider using SMS for dunning
6. If all else fails, pick up the phone and ask if they need a hand updating their card.
Passive churn accounts for up to 40% of all churn.(Probably even higher in January)
This is a massive opportunity because the customer actually wants to continue with the subscription.
So, make sure you are doing everything you can to make it easy for the customer to update their card details.
Otherwise, you are leaving a massive amount of money on the table.
Earn More Money From Existing Subscribers
A great way to grow revenue in January is to sell more products to existing subscribers.
Even if your churn is a bit higher, you will still have active subscribers who will purchase more products from you.
We use Subbly as our platform, and they make this extremely easy with their add-ons and post-purchase upsells (really good features)
We also do something called the Reply Yes process, which makes us a lot of extra money.
We basically send a personal email to our subscribers with an offer for a product, and they reply yes if they want to add it to their next box.
(This is the best way we have found to sell more products and make more money from our existing subscribers)
I will have more content and some training around this entire process very soon…
The point is you should be selling more products to your existing subscribers, and if you aren’t, you are missing out on a lot of extra revenue.
You have subscribers sitting there who want to buy more products from you but don’t because you never allow them to do so.
Some products which sell great for us.
· Extra dog toys
· Extra dog treats
· Mystery Box
· Jumbo Mystery Box
· Dog accessories etc…
The solution is very simple: if you don’t know what else your customers will buy from you. Send them a survey and ask them.
Customer Acquisition
January can be a very underrated month (depending on your niche) on the customer acquisition side of things.
A lot of people think January is a complete write-off, and there is no point even advertising, which isn’t the case at all.
The truth is purchase intent does tend to drop a bit after Q4…
But guess what??
So do ad prices…
Big companies pull back their budgets, and there is way less competition than in Q4.
But there are still a lot of customers out there who can be acquired.
So if you get your offer right, you can sign up a lot of new customers for a very cheap price (we have done it many times in the past to kick off the year)
We are continuing with a free dog bed in BusterBox, as it has been performing great for a long time.
Also, you can lean into the fact that many consumers feel a bit down after Christmas, and your subscription box can be used as a treat to cheer them up.
It will depend on your niche, but if you mix that marketing angle with a good offer, it’s highly likely you will get a lot of new subscribers signed up this January.
Now, this can work on all different channels, FB Ads, TikTok, Affiliates, etc.…
The fact is there are customers who would love to sign up for your box, and if you get your marketing right, there is a good chance you will get them for a very low CAC in January.
(There is no better way to start the year than a fresh blast of new customers signing up to your box)
I hope you found this article helpful, and I wish you all the best for 2024 (I hope you have the best year ever).
Things have been difficult over the last year or so, but there is still so much opportunity out there to change your life with this business model.
If you have any questions about this or the subscription box business model in general, please let me know. Have a great day.
