Loop releases discount incentive in Cancellation Flows

Product Update
Karan Chaudhary
Last Updated On:
January 24, 2023
5 Minutes

Discount incentives are proven to work the best when you're trying to win back your at-risk subscribers. Try out Loop's discount incentive in cancellation flow to prevent subscriber churn and boost retention.

Subscriber churn is an industry-wide issue for DTC brands.

Overall, we found that nearly 40 percent of e-commerce subscribers have cancelled their subscriptions. The higher the churn rate, the more difficult it becomes for subscription e-commerce companies to cover their acquisition costs and to scale their revenues. (Source)

As per our merchant data, one of the top 5 reasons why customers cancel their subscription is “Too expensive to continue”. 

But this reason for churn can easily be prevented by giving customers a discount to stop them from cancelling.

To solve for high subscriber churn, Loop has come up with another addition to its retention stack. 

Our latest feature “Discount Before Cancellation” empowers merchants to give a one-time discount to customers when they try to cancel their subscription and in turn reduces churn.

Does a discount incentive help in reducing churn?

As per our extensive research with DTC merchants, discount is the best option to reduce churn as people react to it much better than other options like skip, swap or pause.

Getting another order with an existing customer (including the discount incentive) yields a better profit margin than getting an order with a new customer.

How do discount incentives work in Loop’s cancellation flow?

When a customer tries to cancel their subscription, an exit survey gets prompted which asks them the reason behind their cancellation.

Once the customer accepts the discount, they receive an automated message about order confirmation with the discount benefit applied. As easy as that.

Merchants can also select all those cancellation reasons against which they’d like to offer a discount incentive. 

The discount that is given to at-risk customers is completely customisable 

How Loop's discount feature prevents misuse and merchant loss?

  • Discounts are abuse-proof. This means that customers cannot use the discount code created for one subscription on any another subscription.
  • All the customers who took the discount are identifiable by the merchant by just taking a single look at their activity log.
  • Merchants can see the revenue they saved when the customers opted for discounts versus cancelling the subscription.

Offering your at-risk subscribers a one-time discount is a great addition to your retention strategy and preventing churn.

Contact our team to get beta access to this feature now.