How we reduced Snug’s subscription churn by 61%📉

TLDR: Snug reduced subscription churn by 61% and lifted monthly recurring revenue 15% by addressing payment failures using Stripe Billing, customer outreach, and a custom SMS integration.

Snug is a free daily check-in service for seniors living alone. People use it instead of more cumbersome solutions like Life Alert because it is free, easy, and doesn’t require a separate device. Every day, Snug checks in with customers at a pre-selected time to confirm they are ok. If they don’t check in, Snug alerts their emergency contacts. This basic functionality is free, but for $99/yr (or $9.99/month) a professional dispatcher will call them and emergency contacts if they don’t check in. If the dispatcher doesn’t get confirmation that the customer is ok, the dispatcher will arrange a wellness check by local emergency services.

Late last year we noticed on our Stripe dashboard that Snug’s monthly subscriber churn rate had hit an unexpectedly high 4.5%. Though not bad for a consumer subscription product, it was much higher than our historical norm.

Our first move was to wait and see if it was just a random blip or if it sustained. It unfortunately sustained.

When we dug into Stripe’s analytics, we saw that we had many past due payments and payment failures. Customers were still using the product every day. The predominant issue seemed to be expired credit cards, not explicit cancellation by users. Phew. This gave us clarity that our root need was updating payment info and doing smart retries.

Here’s what we did to tackle the problem:

First, we upgraded to Stripe Billing from the basic Stripe plan we had. It was a fast, no code solution. Stripe Billing’s smart retries made a big difference in reducing payment failures, as did the email messaging about payment failures. The churn reduction was noticeable within a month.

Second, after Stripe Billing’s impact was clear, we started directly emailing customers who were significantly past due. This effort was specifically targeted for those who already had lapsed payment methods before we moved to Stripe Billing. They were still using and depending on the product every day, so we wanted to give plenty of notice. We sent 5 email reminders before affecting the Dispatch service. The email provided a Stripe-hosted link where they could update their payment info. The impact was a 15% increase in MRR.

Some customers were worried the emails requesting payment info were a scam. Sending out a targeted email via Snug’s traditional email channel was critical to assuage fears. To streamline the process, we also wrote standard responses to use when customers wrote in about this concern.

Finally, we built a solution to send programmatic SMS when a payment failed. This was like the email reminders, but text messages get read faster and are less likely to get lost. We wanted people to update their payment quickly so they didn’t lose the service! This also had a noticeable impact with payments being collected days faster and a reduction in churn.

We are considering making a Stripe app to productize the programmatic SMS for payment failure. If you’re on Stripe with a subscription and would be interested in this, drop me a note here!