Adding new subscribers means little if they don’t stick around.

Recurring revenue depends on retention. Yet, many companies still treat churn as a reporting metric instead of a solvable problem. Acquisition rates have fallen from 4.1% to 2.8% over the last 4 years making it harder, and more expensive, to bring in new subscribers.

Retention is becoming even more important as competition increases, acquisition rates decline, and subscribers become more adept at navigating subscriptions.

This article breaks down proven strategies to help you keep more of the customers you’ve already earned. You’ll learn where retention breaks down and how to fix it.

The importance of subscriber retention

Retention is the most reliable way to generate revenue for your company, owing to a series of facts such as: 

  • It costs 5 times as much to acquire a new customer as it does to retain existing ones

  • Paused subscribers reactivated and generated over $200 million in revenue in the last 4 years.

  • 50% of existing customers are more likely to try new products, and 31% spend more than new customers

  • Loyal customers are 5 times more likely to make repeat purchases, 5 times more likely to overlook mistakes, 4 times more likely to refer your brand to others, and 7 times more likely to try new products or services

  • Regular customers account for 60% of direct-to-consumer sales

  • 20% of “new” subscribers are returning customers

  • Retaining just 5% more of your customers can directly increase your bottom line from 25% to 95%. 

Understanding churn

Churn is the rate at which subscribers discontinue using your services. There are two main types:

  • Voluntary churn: Sometimes referred to as “Active Churn”, is when customers actively cancel a subscription. Common reasons include poor onboarding, lack of value, or better alternatives.

  • Involuntary churn: Sometimes referred to as “Passive Churn”, is when subscriptions end due to failed payments, billing errors, or other administrative processes. This is often preventable with better payment systems and retry logic.

Recurly’s data shows that involuntary churn, primarily caused by failed payments, can account for up to 7.2% of monthly subscriber loss in some businesses.

Benefits of retention

Retained subscribers generate more revenue, stay longer, and are more likely to refer others.

  • Increased revenue: Retained customers spend more over time and are more likely to upgrade plans

  • Higher lifetime value (LTV): The longer a subscriber stays, the more valuable they become.

  • Stronger customer relationships: Long-term subscribers are more likely to refer others and advocate for your brand

Improve customer retention with these strategies

Subscriber retention improves when systems, experiences, and communication are designed to keep customers engaged and help them feel heard. The approaches below can have a direct impact on churn and retention.

Better onboarding and user experience

Good onboarding means the customers see the value from the very beginning, which leads to quick conversions. Slow, or confusing onboarding leads to early churn, as every extra step or point of confusion risks losing a customer before they ever see the benefit.

The data supports this too. Only 24.9% of users return to a mobile app the day after downloading, that number drops to 9.4% in 2-weeks, and within 90 days, 71% of users have churned.

  • Use interactive guides or tutorials to walk users through core features

  • Personalize onboarding based on account type or user behavior

  • Focus on accelerating time-to-value, not just completing setup steps

  • Target acquisition efforts on users who are more likely to engage and retain

  • Keep your interface intuitive and frictionless to prevent early drop-off

Deliver personalization

When offers, messaging, and product experiences feel generic, subscribers lose interest. Personalization, based on behavior, preferences, or plan type, keeps them engaged.

  • Show personalized product recommendations based on usage patterns

  • Send targeted offers and content based on subscriber activity

  • Let subscribers choose plan lengths, billing cadences, and feature sets that fit how they use your product/service

  • Segment emails and notifications to reflect subscriber interests and timing

  • Offer regional payment methods and local language options for billing, support, and marketing, to make it easier for consumers to engage organically. 

Build a strong community

Community features improve engagement by giving subscribers spaces to interact, share feedback, and connect with others who use the same product or service in micro-communities. Examples of communities in action are Strava, that builds community through group challenges, shared goals, and social tracking features, and MeUndies that keeps members engaged with exclusive access, early product drops, and events.

  • Launch forums or private groups focused on shared interests, either internally or by leveraging platforms such as Reddit, Discord, and mainstream social media.

  • Maintain regular interaction through prompts, discussions, or AMAs

  • Highlight and encourage user-generated content

Provide proactive customer support

When support is hard to reach or slow to respond, subscribers are more likely to cancel. Fast, accessible help reduces frustration.

  • Offer a detailed knowledge base and updated FAQs

  • Use live chat or email support with fast response times

  • Improve first response times by automating ticket routing and resolution

  • Share updates and tips through regular newsletters

  • Monitor support requests to identify common problems before they repeat

Exclusive perks and benefits for subscribers

Exclusive benefits give subscribers more reasons to stay subscribed.

  • Provide access to special content, early releases, or VIP features based on subscriber tenure

  • Create loyalty programs or tiered memberships that reward long-term engagement

  • Offer high-value perks such as early access or personalized recognition. This is seen with Alaska Airlines and The Guardian, who used exclusive offers and personalized content to extend subscriber retention

Flexible billing and payment plans

Flexible billing, like plan changes, pause options, and local payment methods, makes it easier for subscribers to stay. Paused subscriptions increased 68% YoY in 2024, generating over $200 million in revenue from subscribers who later reactivated.

Flexible plan management

  • Allow subscribers to upgrade or downgrade plans at any time without penalty

  • Make pricing tiers clear and easy to manage from the account dashboard

Pause options

  • Offer the option to pause subscriptions instead of canceling

  • Use pause features during seasonal churn periods or when subscribers reduce spending

  • Explore various pause durations and refine your approach. Options might include one month, three months, or more, depending on your needs

Renewal personalization

  • Send renewal offers based on subscriber lifecycle, engagement, usage, or tenure

  • Use behavioral data to time renewal messages before billing cycles

  • Identify at-risk subscribers and trigger in-app personalized messaging to drive engagement and even upsell

Localized billing

  • Localize billing for currency, language, and tax requirements in each region

  • Support regional payment methods and gateways to reduce payment failures

  • Automate VAT and sales tax compliance through Recurly’s global expansion features

  • Improve billing success rates with smart routing across multiple gateways

Implement a feedback loop

Collecting feedback at critical junctures, like onboarding, plan changes, and cancellation, helps identify why subscribers leave and what to fix to keep them.

Subscriber feedback strategies

  • Monitor account activity to identify at-risk subscribers before they cancel

  • Send surveys at key moments, such as after onboarding, during inactivity, or post-cancellation

  • Track reasons for churn and categorize them by product, billing, or service issues

  • Close the loop by responding to concerns and updating the experience based on feedback

Leverage data-driven insights

Retention depends on knowing what’s working and where subscribers are dropping off. Tracking performance data helps you act quickly and make better decisions.

Key analytics practices

  • Track churn rate, lifetime value, and engagement by plan, cohort, or location

  • Use this data to test and refine pricing, onboarding, and messaging strategies

  • Automate billing and dunning processes to reduce failed payments and involuntary churn

  • Build dashboards that surface subscription trends and identify areas for improvement

How subscription management software helps improve retention

Subscriber retention relies on such factors as better member journeys, onboarding, personalization, flexible billing, feedback loops, and analytics, all of which contribute to retaining subscribers.

Subscription management software like Recurly helps automate and scale retention with the following features:

  • Automates failed payment recovery with intelligent retry logic and account updater support

  • Supports plan changes, pause options, and personalized renewal offers

  • Localizes billing with currency, language, and tax settings for global customers

  • Provides real-time analytics on churn, engagement, and customer lifetime value

  • Integrates with Redfast to deliver targeted lifecycle messaging based on subscriber behavior

Download our State of Subscriptions report to learn more about retention, or book a demo to discover how Recurly helps businesses optimize customer retention.