The Dreaded Customer Exit: Hostage Holding vs. Surrender
The web and the subscription business model are like cheese and wine, a Shackburger and crinkle-cut french fries, Sriracha and insert_anything_here. The perfect pair. Find whatever floats your boat and start enjoying at a lower price than would be required for an outright purchase. It is an alignment of incentives, smaller upfront investments on the purchaser’s behalf and the requirement of continuity from the provider, lest the relationship and exchange of funds expire.
Not so long ago, purchasing a new subscription or membership required ancient activities like the coalescing of ink and dead tree shavings or conversing with another human. Nowadays, with the swiftness of a few thumb taps on a screen, you can start a subscription that rewards with instant and continuous convenience, curation, access or some combination of the three. All is well. Everyone is happy.
Then comes… the exit.
It is, as they say, that all good things come to an end and the end is certainly where the pain begins with the subscription business model. The degree of pain usually depends on which side of the relationship you’re on, but in some cases, it’s akin to a colonoscopy, crappy for everyone involved.
Most consumer termination experiences follow one of two schools of thought: “hostage holding” or “surrender”.
Hostage Holding
As consumers, we have all experienced hostage holding. This experience usually starts with the requirement of picking up your phone, dialing a 1–800 number, playing a game of decision tree with an exponentially dumber version of Siri, only to reach the ripe cherry on top of this turd sandwich, a fine chat with a person who not only isn’t in the mood to help you cancel, but appears to despise you as though you interrupted them while they were sipping their first fresh Pina Colada on vacation in Bora Bora.
While hostage holding appears to be worse for the consumer, the field of pain and misery is leveling out thanks in large part to social media. Hostage holding has been a standard since the origin of recurring billing, but the ability for consumers to share their agony-laden experiences with other would-be customers on Twitter, Facebook, and review sites creates strong incentives to eliminate this approach.
This is not to mention the fact that customers, who may have otherwise returned in the future, are left with PTSD and a clear reminder that they should allocate their funds in another company’s direction the next time they are in the market.
Surrender
On the opposite end of the spectrum, we have what I like to refer to as “surrender”. This approach is a much more recent development and it goes about as you’d expect. The consumer decides to cancel, they track down the cancel link/button, click, and voila! All done.
While this would appear to be a win for the consumer, research proves otherwise. According to research from Accenture, 81% of customers who cancelled a service, reported that businesses could have done something to retain them.
This makes sense, after all, a little appreciation can go a long way. The surrender method is equivalent to texting your significant other to inform them that you would like to end the relationship only to be greeted with, “Sure thing! Bye!”. That’s it? Where’s the love? The gratitude? Not even a “Why?”, or a “how about Waffle House? I’m buying!”. If the relationship is meaningful, which it most certainly is (unless said consumer hasn’t paid their bill for the last six months or happens to be sharing their account credentials with their extended family of 17), shouldn’t there be some level of effort put into preservation? The surrender approach serves nobody and is nothing more than a sour cocktail of denial.
The negatives on the business side of the surrender approach are much more clear. If a business isn’t learning, it’s losing. If you aren’t learning about issues that are causing customers to leave and working through solutions to satisfy them, what exactly ARE you doing?
A Balanced Approach
What this problem calls for, as with many of life’s torments, is balance. In our experience, this balanced approach should answer these five questions in the affirmative:
- Is the business learning what went wrong?
- Are they providing potential solutions to the problems?
- Are alternatives to canceling being offered?
- Is the business preventing malicious customers from “gaming” the system? (e.g. getting a discount each month)
- If the customer really wants to leave, can they without massive frustration?
If a balanced approach like this meshes with the major developments in machine learning and automation, we end up with an exponentially improved method for solving this problem. The result can be an intelligent process that self-optimizes, identifies how best to solve for each particular customer, prevents the business’s alternatives from being gamed, and delivers an experience that satisfies feelings of discontent while offering a clear exit to those bound and determined to leave.
While the subscription business model continues to grow, delivering a spectrum of benefits to both consumers and businesses, there is still work to be done when it comes to the end of the road. With a little thought and a few of the major advancements in technology, there are better ways to handle these experiences, making the exit not quite so dreaded for both sides of the relationship.
