TouchNote avoids a cancellation surge by increasing saves 56%
The Problem Solver: TouchNote, sending joy and greeting cards for 100,000 subscribers
TouchNote is a mobile app for smartphones, tablets and website for sending printed, personalized postcards, greeting cards, other photo products as well as gifts. TouchNote was notably one of the first subscription card sending services. Currently over 100,000 customers subscribe to touchnote to send greeting cards monthly.
It operates in the $15B worldwide cards and photo merchandise market, and ranked as one of Europe's fastest growing tech companies, in Inc. 5000, Deloitte Fast50 (2015),Sunday Times TechTrack (2017) and Financial Times 1000 (2018).
Business Context: TouchNote’s robust subscription program enables customers to send cards monthly
TouchNote uses Chargebee for Billing and has a custom-built iOS application on top of their web store. They are present in both the US and UK markets.
TouchNote’s eCommerce store allows customer to purchase a single time, or to subscribe to send cards monthly at a discounted rate. There are two tiers of subscriptions - a monthly tier and a yearly tier, with the yearly being the most popular plan selection. The web store supports both UK and US Customers.
The Challenge: Rapid Rise in COVID subscriptions creates downside revenue risk a year later
At the beginning of the COVID pandemic in March 2020, customers were hungry for real connection. As a result, Touchnote’s business exploded. Their subscriber count doubled in a matter of months, which led to increased revenue for the company. The bulk of the subscription plans were active for 12 months (1 year) from the time of start. Customers are able to order 2 gift-cards a month for a year on the main tier (Silver) of the subscription.
This explosion in subscribers also created a downside revenue risk that, once these subscribers hit their 12 month renewal, they would cancel their contracts. It was imperative that TouchNote find a way to optimize the cancellation flow and ensure these customers were satisfied to decrease potential cancellations.
“We acquired so many customers that the growth of TouchNote depended on keeping our existing customer base on renewal.”
-- Camilla O'Connell, Growth Marketing Executive, TouchNote
The Solution: Constant testing through Brightback minimizes customer churn
Brightback had already been implemented and integrated with Touchnote’s technology stack when the business focus started shifting towards retention at the beginning of 2020. The Touchnote team used Brightback audiences to separate out their international vs. domestic customers.
To forestall any customer cancellation cliff, the TouchNote team began a program of strategic and targeted offer testing. They tested 4 different discount offers - 40% off, 50% off, and offers of $23.99, which is roughly equivalent to 50% off. In addition they included offers to pause/delay and downgrade the plan.
“From July 2020 until the COVID cliff, Brightback testing was front and center to give customers options and improve our save rates. It is much cheaper to retain a customer than require a new one, so this became a core focus for hitting our growth numbers”
-- Camilla O'Connell, Growth Marketing Executive, TouchNote
TouchNote learned two key insights very quickly -
- Subscribers who were likely to churn had not used all of the “cards” in their subscription.
- Subscribers were more likely to respond to a % discount vs. a $ off, even if the discount amounts are the same (50% off vs. 25 pounds off a year).
The Result: 56% increase of save rate in less than 12 months
TouchNote worked with Brightback to build a testing plan focused on saving customers. They tested discounts, free cards/upgrades, and pause/delay. Save performance moved from 16% to 25% in a year.
Interestingly, TouchNote found that a 40% discount offer performed almost identically to a 50% offer, decreasing the lost revenue from offers for the same result.
In addition to testing experiences at cancellation, the TouchNote team proactively engaged customers who were at-risk of canceling their plan because they hadn’t used all their cards. A specific nurture journey was put in place to encourage customers to use the cards in their subscription. This served to further decrease cancellation starts, not just cancellation completes!
“Despite there being the potential for a huge cliff, our overall cancellation numbers only increased by a few percentage points in those critical months in 2021. This showed that the combined approach of proactive outreach and offer-optimization at cancellation were working"
Camilla O'Connell, Growth Marketing Executive, TouchNote
