Subscription Cancellation: 9 Most Common Reasons Why Customers Cancel

Everyone tells you about different subscription business management strategies, however, it is equally important to study subscription cancellations. The study of subscription cancellations can help you reduce customer churn rates.

Today, one of the biggest concerns for subscription businesses is to manage and control customer churn or in other words subscription cancellations. 

In this article, we will start with the reasons behind subscription cancellations. Then we will take you to overcoming excessive subscription cancellations.

9 Common Reasons Behind Subscription Cancellations

There can be various reasons for subscription cancellations. Also, there are some general reasons for subscription cancellations.

However, some of them can be business or niche-specific which means they are solely because you are doing business in that specific business niche. So, here are some general reasons for subscription cancellations.

1. Customer Dissatisfaction 

The most common reason for subscription cancellations is customer dissatisfaction. There are various touch points where customers interact with your business.

You need to satisfy your customers on all these touch points. For instance, the content that you post on your website or for the sake of marketing is a touch point. 

With this, you communicate with your customers. You tell them about what you are offering. So, you need to be truthful because today, customers have access to knowledge. They are smart and puffery cannot help any business.

So, even when you are marketing your offerings, do not tell potential clients what you do not offer. That’s what can help you in customer retention.

2. Better Alternatives

Today, in the subscription business market, many retailers offer the same thing you offer. However, to retain customers and avoid subscription cancellations, you need to offer some add-ons or keep pricing flexible.

There can be any other strategy that you opt for so that the customer may stay on board. Still, no one can guarantee that the customer will not go to other retailers offering the same thing or something better. 

Customers always have options. What can help you the most is to keep your customers engaged. No one can change pricing strategies and pricing plans every day just because there are competitors offering something the same at a lesser price.

So, when customers are engaged, they stay on board for a longer duration. This engagement makes them feel they are valued.

3. Changing Circumstances

This factor contributes to increasing subscription cancellation links with alternatives to your products and services available in the market.

You need to continuously study the market. Never underestimate startups and small businesses that enter the market. They are always hungry for customers so to get more customers they can even do crazy things. They are the ones who change circumstances and give you the competition.

Even the competition is an opportunity for you. It triggers your teams to think unconventionally and come up with new ideas. If you or your teams fail to cope with changing circumstances, the subscription cancellation rate will automatically increase.

4. Billing and Payment Problems

There are some technical issues as well that can cause subscription cancellations. These technical issues include billing and payment problems.

If your subscription billing management system has failed to manage bills, then your customers will cancel subscriptions. Why?

When you bill customers wrong, it means to delay payments yourself. When customers receive invoices in which they are billed wrong, they contact customer support teams. They file their complaint.

Even if you have an automated system, it is a nuisance for customers to contact customer support teams and get their bills corrected. So, if they are annoyed, the chances of subscription cancellation are high. 

5. Limited Features and Functionalities

Businesses have diverse business needs. So, to fulfill these business needs, they need a tech stack that can fulfill these business needs.

So, if you are using such subscription management software that has limited features, then it is better to upgrade your tech stack timely. Customers may feel that they aren’t receiving enough value for their membership if they discover that a service or product lacks necessary features or doesn’t satisfy their particular needs.

They may become frustrated and disappointed as a result, which may drive them to look for alternatives with greater features and functionality that better suit their needs and expectations.

6. Free Trials and Freemiums

Many B2B SaaS companies offer subscriptions for their SaaS products and services. They offer freemiums and free plans for their SaaS offerings.

Offering freemium and free plans is sometimes their need because customers cannot touch or test their products and services without free plans. However, when these freemiums are not managed professionally and properly, they lose potential leads who could turn to their customers. 

For instance, offering a free trial for a longer duration is a poor strategy that can cause subscription cancellations. When they find a SaaS product completely free for a long time, there is involved a psychological factor.

They start taking this SaaS product for granted and think that they could get it free, then what is the reason to pay for it? So, technicalities like this are involved in offering free trials and freemiums.

7. Poor Customer Support

Poor customer support experiences are a major cause of subscription cancellations. When subscribers encounter indifferent, unhelpful, or inefficient customer support, it can cause frustration and a sense of abandonment.

Whether it is lengthy response times, inexpert support agents, or an inability to resolve issues, these experiences affect trust and satisfaction. Customers expect timely, knowledgeable help when they face problems or have questions, and failing to meet these expectations can prompt them to seek alternatives that offer better support.

Therefore, businesses must prioritize robust customer support to retain customers and strengthen long-term loyalty.

8. Technical Issues and Difficulties

Technical issues and problems have an important role in subscription cancellations.

When subscribers frequently encounter issues such as frequent crashes, slow loading times, or confusing user interfaces, it can be a big source of frustration. These issues not only spoil the user experience but also deter subscribers from fully using the service or product they’ve paid for.

In a competitive landscape, customers have little patience for persistent technical anomalies. As a result, addressing these challenges promptly and effectively is needed for businesses to maintain a happy and loyal subscriber base.

9. Cost Concerns

One of the main reasons people quit subscriptions is cost. Customers are using subscription-based services more frequently to meet a variety of demands, but the cost of these subscriptions can mount up quickly.

Customers may choose to terminate their memberships to save money if they believe the cost exceeds the value they receive. This is particularly common when there is a lack of pricing transparency, unanticipated costs, or price rises.

Businesses must carefully analyze their pricing plans and make sure that the perceived value of their offerings justifies the cost in the eyes of their subscribers to alleviate this issue and reduce churn.

Conclusion

So, these are the reasons behind subscription cancellations, however,  to overcome them, what can help you the most is the subscription billing automation.

There are various B2B companies offering subscription billing solutions. You can opt for a robust subscription management platform to control subscription cancellations.

The reasons for subscription cancellations may be different for your business. You just need to find them, and to nip them in the bud, opt for a robust subscription management platform that can offer retention management as well.