This week on CodePen Radio, something that affects all web apps that use the subscriber model: Churn.

  • 1:08 CodePen’s primary income comes from people signing up for Pro accounts. The idea is that we grow as a business as more people sign up. As we create new and valuable features, more people will sign up! (hopefully)

What is churn?

  • 2:20 Churn is the rate of people unsubscribing from Pro accounts. You can get this number by dividing the number of unsubscribes from the total number of subscriptions.

  • 3:44 Tracking churn is difficult. Some people don’t include people who unsubscribe in the first month because it’s a very common thing.

Reducing churn with yearly subscriptions

  • 7:23 Yearly subscription plans are a great way to combat churn, and they are also a loan. Your users are saying that they trust you enough to give you money up front to use your app.

  • 9:32 Yearly subscriptions give us a chance to validate why developers use CodePen, and it also gives developers a chance to get used to using CodePen in their daily workflow.

  • 10:30 You should be giving a significant discount for long term subscribers. 10% is a pretty common number.

A common cause of churn: outdated billing information

  • 10:58 You might lose a customer because their credit card information changed. This has happened to a lot of people this year, because of all the credit card number leaks (remember Target?). If this happens, you should give your users a grace period and notify them by email, and give them a direct link to where they can update their information. Make it simple and easy for them.

  • 14:00 CodePen just started accepting yearly payments through PayPal. If you are billing a PayPal account, the account owner’s bank account is linked to Paypal, so even if their credit card expires, they can still be charged. As hard as it is to work with Paypal’s API, this is a nice safety net.

Other ways to reduce churn

  • 15:33 A positive way to reduce churn is to make your app so good that people don’t want to leave. Make your product or app valuable.

  • 16:49 Once a user has gotten used to using CodePen in their workflow, they are less likely to leave. We are looking at creating educational material for new CodePen users, to get them more comfortable with the ins and outs of our app. This will hopefully reduce the number of churn in our subscriber base.

  • 18:55 Remind your users that your application exists: send out monthly emails explaining your new features, and highlighting important parts of your application. Keep your users engaged.

What happens when a user decides to cancel?

  • 19:44 Why do users cancel their subscription? It probably came from a moment of frustration or unhappiness. Maybe they couldn’t figure out how to do something, or maybe your application doesn’t have a feature they were looking for. This is where customer support and documentation comes in; they can help get a user out of that frustrated state and back into happy and satisfied mode again.

  • 20:42 Should it be easy for customers to cancel? You shouldn’t try to hide the “cancel account” button. It doesn’t need to be a prominent option in the menu, but don’t pull a Comcast! Don’t make the process of canceling a bad or inconvenient experience. That will only add to your user’s frustration about your app and make them less likely to recommend your app or return in the future.

  • 24:45 You could also provide a “downgrade account” option for users who don’t want to pay anymore. You might see them on the paying list again sometime in the future.

  • The goal of analyzing churn numbers is to identify what is working, and what isn’t. If you can identify what your users value and what they don’t, you can use that information to adjust the course of your business.

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