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In the dynamic and competitive world of subscription-first D2C businesses, understanding customer behavior and engagement patterns is crucial for sustainable growth.
At Loop Subscriptions, we rely heavily on cohort analysis to share growth strategies with our brands. It is a framework that groups subscribers based on their start dates, and reveals patterns of three critical metrics:
It measures the proportion of customers who maintain their subscriptions after their initial sign-up, directly reflecting the product’s relevance, effectiveness, and value.
The trends between Month 0 and Month X offer insights into customer satisfaction and product effectiveness.
Understanding customer behavior and subscription dynamics through various time frames, such as 3, 6, 12 months, and year-to-date, provides insights into both short-term and long-term customer engagement.
Here is a screenshot of 6-month cohort analysis of one of our merchants
Here is how Loop CSM team analyses this data and works with the marketing and product teams of our merchants to come up with insights
(** The following screenshots may or may not be from the same D2C brand. The important part is the process for deriving insights from the cohort analysis)
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The high retention rates in the sample cohort analysis shared above indicates effectiveness of the product and how quickly the product addresses the issues of their target audience.
Positive subscription reviews also help in contextualising this trend. When a subscriber experiences product satisfaction, they are more likely to continue with the subscription and also leave positive feedback of their experience**
This retention pattern also shows the effectiveness of their new subscriber onboarding process.
Brands must constantly improve their onboarding process with clear communication about product benefits and usage- Ensures high customer satisfaction during the initial period of subscription. **
They also invest in subscription gamification by surprising customers with free gifts or discounted products in the subsequent orders. Gamification helps in ensuring low churn rates right from the beginning of the customer journey.
See how 2500+ brands gamify subscriptions on Loop.
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This pattern usually suggests that the natural lifecycle of their product’s usage is coming to an end. Our inbuilt advanced cancellation analytics dashboard is connected to our subscription cohort analysis and explain the reason behind the low retention rates
Here is a pivot table of number of subscription orders completed before cancellation and the cancellation reason (in-built inside Loop). Since subscribers already have enough product in stock and don't want anymore, they cancel the subscription and share the reason behind cancellation through an exit-survey.
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In order to tackle this, brands must start investing in long-term subscriber engagement (>4 months) strategies. Some of the popular long-term engagement strategies within our merchant base include:
This is a critical tool for strategic decision-making in subscription-first businesses.
By understanding and analyzing retention patterns across various time frames, subscription businesses can gain a holistic view of their performance, adapt to changing customer needs, and ensure long-term success in a competitive marketplace.
Emma Johnson is celebrated for her strategic brilliance and innovative flair. By seamlessly blending creativity with data-driven insights, she has propelled Loop’s brand to new heights, establishing it as a formidable force in the Shopify Subscriptions space.
