Expert Connect
Lifecycle Marketing for Subscription Companies
Ceri Phillips (Ipsy, Care.com) shares hard-earned lessons on reducing churn and building real retention in subscription businesses
Ceri Phillips (Ipsy, Care.com) shares hard-earned lessons on reducing churn and building real retention in subscription businesses
A customer signs up for a subscription, lured in by a tempting discount or an exclusive offer. For the first few months, they engage—maybe they try a few products, explore the service, or take advantage of perks. But soon, the excitement fades. They skip a month, forget to log in, and before long, they cancel. Multiply this by thousands, and the result is a churn problem that drains revenue faster than new customers can replace it.
Retention should not just be about flashy promotions or one-time incentives, but delivering consistent value, creating personalized touchpoints, and intervening before customers drift away. Without a strong lifecycle marketing strategy, even the most promising brands struggle to keep subscribers.
To uncover what actually works, we spoke with Ceri Phillips, a lifecycle marketing expert with leadership experience at Ipsy and Care.com. She shared key insights on why subscription businesses require a different approach and how to build a retention strategy that keeps customers subscribed long-term.
For years, e-commerce followed a clear playbook: drive traffic, optimize conversions, and maximize revenue per transaction. Once a customer bought, the job was done. Subscriptions changed that. Instead of a single sale, businesses must now convince customers to stay—month after month.
This shift brings challenges that traditional e-commerce never had to contend with, including:
1. Acquisition Is Just the Beginning
Revenue isn’t realized upfront but spread over time. Profitability hinges on retention, and early churn can wipe out customer acquisition costs before a business breaks even.
2. Subscribers Are Renters, Not Buyers
Every billing cycle, customers reconsider whether the product is still worth it. Even satisfied users churn—not because they dislike the product, but because they forget about it, no longer see its value, or simply want to cut costs.
3. The Fine Line Between Engagement and Fatigue
Too little communication, and customers disengage. Too much, and they cancel out of frustration. The right balance is different for every subscriber, making it easy to misstep.
These challenges make one thing clear: subscription businesses can’t rely on a transactional mindset. Instead, they must focus on guiding customers through a well-structured journey—one that nurtures engagement, builds long-term habits, and proactively prevents churn.
In a subscription business, subscribers go through different stages, regularly deciding whether to stay or cancel. Understanding this journey and its milestones, helps brands keep them engaged, deliver value, and reduce churn.
A potential customer interacts with the brand—signing up for emails, completing a quiz, or browsing products—without providing payment details. Engagement here significantly impacts the likelihood of a paid subscription.
Key Moves
The customer enters payment details and subscribes. Optimizing the onboarding experience here prevents buyer’s remorse and early churn.
Key Moves
The first unboxing experience sets the tone for customer retention. If expectations aren’t met, cancellations spike before the second shipment.
Key Moves
The first renewal cycle is where many customers decide to stay—or cancel. Those who renew past this point are far more likely to become long-term subscribers.
Key Moves
A customer cancels their subscription, but this doesn’t have to be the end of the relationship. Understanding why they left enables precise win-back strategies.
Key Moves
A previously churned customer returns, often with higher intent. Returning subscribers tend to be more engaged and have a higher lifetime value than first-time customers.
Key Moves
Long-term engagement plan: Keep resubscribed users engaged with tailored content and proactive retention strategies to prevent repeat churn.
Effective lifecycle marketing relies on segmentation and personalization. Without them, businesses risk sending irrelevant messages, overwhelming users, and increasing churn.
A well-structured segmentation strategy groups subscribers by behavior, value, and engagement patterns, allowing for targeted actions that improve retention and revenue.
The first step to building segments and personalization is to collect data. Businesses should collect data early and continuously refine it based on user behavior. The data can be collected through:
Example: A wine subscription service could use a quiz to determine taste preferences at sign-up and then refine recommendations based on what the customer actually enjoys over time.
Subscription businesses can categorize their customers in multiple ways, but the most effective segmentation models focus on behavior, value, and predictive signals.
Behavioral segmentation groups users based on how they interact with the product and brand. Common behavioral segments include:
Not all subscribers bring the same revenue. Some are worth much more over time. Value-based segmentation helps businesses prioritize high-value customers and identify those likely to churn. Common segments include:
Predictive segmentation uses historical data and AI to identify users likely to churn, upgrade, or convert, enabling proactive retention strategies. Common segments include:
Segments allow for creating personas, which help craft more targeted messaging, offers, and engagement strategies. Instead of a one-size-fits-all approach, personas reflect different customer behaviors, motivations and needs. Some common types in the subscription business are:
Signs up for discounts or free trials but rarely converts to a paying subscriber. Engagement is typically low during the trial period.
Motivation: Seeks short-term value but is unsure about the long-term fit.
Strategy: Focus on strong onboarding, early engagement nudges, and limited-time offers to encourage conversion.
Pays regularly but rarely engages with the product, leading to silent churn.
Motivation: Subscribed for convenience but doesn’t see the value in using it regularly.
Strategy: Highlight product benefits, send usage tips, personalized recommendations, and showcase how others use the products to reinforce value.
Highly engaged, frequently renews, and refers others
Motivation: Seeks to maximize value and enjoys being part of the brand community.
Strategy: Offer exclusive perks, referral incentives, and VIP treatment to deepen their loyalty.
The key to long-term retention lies in delivering timely, relevant, and personalized marketing campaigns that guide users from their first interaction to long-term loyalty.
Below are the five most impactful lifecycle marketing campaigns every subscription brand must implement to drive engagement, reduce churn, and maximize lifetime value (LTV).
Prospects often hesitate to convert despite showing interest. This flow engages them, builds trust, and pushes them toward the final step of signing up.
Key Plays
Once a subscriber converts, the goal is to get them actively engaged. This flow educates users and drives early interaction, ensuring they start using the service regularly.
Key Plays
Many users show interest but abandon at the final step. This flow helps recover these potential subscribers with targeted, timely nudges to finalize their commitment.
Key Plays
Engagement emails should be tailored to each type of subscription. Whether it’s a content-based, product-based, or service-based model, these campaigns maintain interest and keep users coming back.
Key Plays
Subscribers may churn for various reasons, but with the right approach, many can be brought back. This flow targets churned users with personalized incentives to re-subscribe.
Key Plays
Exclusive Re-Engagement Offer: Provide a limited-time discount, free trial, or a special incentive to entice return.
To improve lifecycle marketing, businesses must track key metrics and adjust strategies based on insights. Measuring performance reveals gaps in engagement and retention, while optimization ensures campaigns adapt to customer behavior for maximum impact.
Monitoring the right metrics ensures marketing efforts drive long-term growth. By analyzing engagement, retention, and churn, subscription brands can make data-driven decisions to improve performance.
Focus: Keeping subscribers engaged and preventing churn.
Why It Matters: Retention reflects product value, and churn signals dissatisfaction. Reactivation shows how many lapsed users can be won back.
Action:
Focus: Measuring the effectiveness of communication and user interaction.
Why It Matters: High open rates indicate strong subject lines, while CTR and conversion rates show content and messaging effectiveness.
Action:
Focus: Maximizing revenue and long-term subscriber value.
Why It Matters: LTV and ARPU reflect profitability, while CAC helps assess acquisition efficiency.
Action:
Customer behaviors, preferences, and expectations evolve over time. Businesses that regularly test and refine their strategies stay ahead of churn and maximize engagement.
Regular A/B testing helps optimize lifecycle marketing by identifying what resonates with subscribers. Testing different elements of emails, offers, and messaging ensures campaigns remain effective as customer preferences change.
What to A/B Test:
Best Practices:
Example: A/B test whether an email with "Last Chance to Renew" and an exclusive offer beats a simple reminder.
Over-communication leads to unsubscribes, disengagement, and churn. Balancing frequency is crucial.
How to Detect Fatigue:
Optimization Tactics:
Example: Track email fatigue and reduce frequency for unresponsive users to prevent churn.
Well-planned lifecycle strategies fail when common pitfalls are ignored. These lead to poor retention, high churn, and reduced profitability.
Here are three common mistakes and how to fix them:
Discounts attract price-sensitive users who churn when the promotion ends. This damages profit margins and ties engagement to price, not value.
How to Fix It:
Example Fix: A fitness app shifts from 50% off renewals to offering exclusive access to advanced training plans, reinforcing product value instead of competing on price.
Ignoring feedback leads to missed opportunities to understand why customers stay, engage, or churn.
How to Fix It:
Example Fix: A meal-kit service introduces a vegan-only plan after receiving feedback from customers requesting it, and promotes it specifically to churned users who had requested it.
3. Ignoring Churned Users Instead of Reactivating Them
Focusing solely on new customer acquisition ignores potential revenue from churned users, leading to lost growth and higher acquisition costs.
How to Fix It:
Example Fix: A subscription box service targets churned users who left due to repetitive products with a “New & Curated Boxes Just for You” campaign, offering personalized selections and new product options to reignite interest.
Lifecycle marketing drives retention and efficiency in subscription businesses. Sortment automates campaigns, real-time messaging, and multi-channel outreach without the need for large teams.
1. AI-Driven Segmentation
Sortment’s AI lets you segment, create attributes, and explore data instantly—enabling precise targeting without delays.
2. Real-Time Messaging
Sortment enables event-driven, personalized messaging with no delays, ensuring you engage users at the right moment.
3. Cross-Channel Consistency
Sortment ensures a seamless customer experience across email, SMS, and app by syncing messaging and offers.
Insights from Ceri reinforced a critical truth: in subscription businesses, long-term success hinges on retaining customers and maximizing their lifetime value, not just acquiring them. Ceri highlighted that focusing solely on acquisition without a solid retention strategy leads to high churn and missed revenue opportunities. Retention efforts are what truly fuel sustainable growth and profitability in the subscription model.
By proactively targeting customers with timely and personalized offers, businesses can create habits, build loyalty, and prevent churn. It’s about understanding when and how to engage customers based on their behavior, rather than relying on blanket promotions that fail to address individual needs.
If you want to reduce churn, improve retention, and grow your subscriber base, reach out to us—we can help your subscription business scale lifecycle marketing with Sortment.
