In today's highly competitive market, subscription-based businesses must focus on retaining customers and increasing renewals to thrive. From credit cards and OTT platforms to shopping apps and insurance policies, renewals are a common challenge. In this blog post, we'll explore how PharmEasy achieved a 2.2x increase in renewals for their 3-month 'PharmEasy Plus' plan and discuss how other companies, including some leading US D2C brands, have leveraged data and analytics to optimize their renewal strategies.
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The PharmEasy Plus Renewal Challenge
PharmEasy's product managers faced a critical question: "Why were users who had the Plus plan not applying for a renewal after its expiry?" With only a 9% renewal rate compared to Swiggy's impressive 65% rate, there was significant room for improvement.
After analyzing user behavior and delving deeper into the customer experience, the team identified two main reasons for the low renewal rate:
Unawareness: Users didn't realize their plan had expired, and the lack of visibility made them simply add the medicines and checkout.
Lack of Information: At the end of the 3-month period, there was no information on how much money was saved or returns obtained. Customers felt like there was no value from the plan and thus didn't renew it.
To address these issues, PharmEasy implemented a two-pronged strategy that resulted in a 2.2x renewal rate and a 41% stability in renewals for a year.
The PharmEasy Plus Renewal Solution
PharmEasy's team took the following steps to increase renewals:
Customized Homepage and Cart Views: The team created different constructs on the homepage and the cart, depending on the user type - a first-time user, a current 'Plus' user, or an expired 'Plus' user. This ensured that the promotion of the plan and its renewal had different strategies tailored to each user's needs.
Detailed Savings and Benefits Information: By informing users specifically what they had saved, how much they saved, and the multiplication of benefits to investors, PharmEasy not only increased renewals but also demonstrated derived value for customers, which made them more likely to renew their current plan.
Using Data and Analytics to Boost Subscription Renewals: Examples from US D2C Brands
PharmEasy's success story demonstrates the potential of leveraging data and analytics to optimize subscription renewals. Here are some ways companies can use data and analytics to improve their renewal strategies, with examples from US D2C brands:
Analyze User Behavior: Understanding the reasons behind users' renewal decisions can provide valuable insights for creating targeted marketing and communication campaigns. Track user behavior on your platform and analyze data points like plan expiry dates, user engagement, and usage patterns. For example, Dollar Shave Club, a US-based D2C razor subscription service, closely monitors customer usage and engagement to optimize their renewal strategies and promotions.
Segment Users: Different users have different needs and preferences. Segmenting users based on factors such as their subscription status, usage patterns, and demographic information can help tailor renewal strategies and promotions to suit each segment's specific needs. FabFitFun, a US-based D2C subscription box company, segments its subscribers based on their preferences and purchase history to offer personalized renewal incentives and promotions.
A/B Testing: Experiment with different renewal strategies, messaging, and promotions to determine which approach works best for your target audience. A/B testing can help you optimize your efforts and refine your strategies over time. Birchbox employed A/B testing to determine the most effective renewal messaging and promotions. By continuously refining their strategies based on data-driven insights, Birchbox successfully boosted subscription renewals and customer satisfaction.
The PharmEasy Plus success story and examples from leading US D2C brands demonstrate the immense potential of leveraging data and analytics to boost subscription renewals. By analyzing user behavior, segmenting users, implementing A/B testing, personalizing communications, and continuously measuring and optimizing renewal strategies, businesses can not only increase their renewal rates but also enhance customer satisfaction and loyalty.
In a world where customer retention is paramount, a data-driven, customer-centric approach to subscription renewals can unlock new opportunities for growth and long-term success. By learning from the experiences of PharmEasy and other innovative companies, your business can overcome renewal challenges, build stronger customer relationships, and ensure a more stable and profitable future.
About Datazip
Datazip's comprehensive suite of features enables analytics teams to streamline data management and analysis processes, empowering them to make informed decisions on subscription renewal strategies. Key capabilities include no-code data ingestion from 150+ sources, a managed data warehouse with open APIs, data transformations and lineage, and robust visualization tools. These features ensure that teams have access to all relevant information, facilitate collaboration across departments, maintain data accuracy and consistency, and provide powerful analytics for better decision-making on renewal strategies.
In addition to its core capabilities, Datazip offers advanced features such as on-demand scaling, backup and restore, embedded analytics, alerts and reporting, role-based data access, and row-level security. These features help organizations eliminate data silos, improve infrastructure performance, save up to 60% on data management costs, and enable self-service for data consumers like analysts and product managers. By leveraging Datazip's platform and advanced features, companies can optimize their subscription renewal strategies and improve overall customer retention rates.
