Reduce subscription churn through coupon offer

Puls Puls retain


Puls offers a $100 coupon for all their services to customers who continue their subscription, leveraging loss aversion to reduce churn.
a screenshot of the retain flow explaining how to Reduce subscription churn through coupon offer

Business Outcome

Reduced Churn Rates

By incentivizing customers to keep their subscription, Puls aims to lower churn rates and retain more customers.

Behavioral Outcome

Feeling of Loss

The coupon offer taps into customers' loss aversion, making them more likely to continue their subscription to avoid losing out on the $100 value.

The Behavioral Science

Loss Aversion

Loss aversion is a cognitive bias that describes how people tend to prefer avoiding losses over acquiring equivalent gains. The pain of losing is psychologically about twice as powerful as the pleasure of gaining.

How It Works

By framing the $100 coupon as something the customer will lose out on if they cancel, Puls leverages loss aversion to make the idea of canceling feel like a significant loss.

The customer is more motivated to continue the subscription in order to gain the coupon and avoid the pain of losing that value.

How It Might Backfire

Perceived Manipulation

Some customers may feel manipulated by the coupon tactic, viewing it as a ploy to prevent them from canceling even if they are dissatisfied with the service. This could lead to resentment and negative word-of-mouth.

How To Test

A/B Tests

Run an A/B test with a control group that is not shown the special offer upon attempting to cancel. Compare the churn rates between the two groups to determine if the coupon significantly improves retention.

Also track longer-term metrics to ensure retained customers remain satisfied and do not churn at an increased rate later on.

Frequently Asked Questions

To enhance a product-led growth (PLG) model using Puls's retention tactic, implement a coupon offer for continued subscription during key moments in the user journey.

For example, offer a valuable coupon (like Puls's $100 offer) when users reach certain milestones or usage levels. This leverages loss aversion to encourage continued engagement and reduces the likelihood of churn at critical points. Ensure the coupon's value is significant enough to make users feel they'd be missing out by not continuing their subscription.

By incorporating this tactic, you can improve user retention, a crucial metric in PLG models, and increase the lifetime value of your customers.

To improve conversion rates using Puls's retention tactic, apply the concept of loss aversion through coupon offers at key decision points in the customer journey.

For instance, when a user is considering upgrading their subscription or making a purchase, present them with a limited-time coupon offer that they'll lose if they don't act. This creates a sense of urgency and taps into the fear of missing out. Frame the offer in terms of what they stand to lose rather than what they'll gain, as loss aversion suggests this will be more motivating.

By strategically implementing this tactic, you can increase conversion rates by making the decision to convert feel like avoiding a loss rather than just making a gain.

To optimize your website using Puls's retention tactic, incorporate loss aversion-based offers throughout the user experience.

For example, display a banner or pop-up highlighting a valuable coupon (similar to Puls's $100 offer) that users can claim by continuing their subscription or making a purchase. Use clear, benefit-focused copy that emphasizes what users will miss out on if they don't take action. Implement this tactic on key pages such as the pricing page, account settings, or checkout process.

Ensure that the offer is prominently displayed and easy to understand, making the potential loss feel tangible to the user. This can help reduce bounce rates and increase engagement with your website's core features or products.

To A/B test Puls's retention tactic, create two versions of your cancellation or renewal process: one with the coupon offer (version A) and one without (version B).

In version A, present users with a valuable coupon offer (like Puls's $100 coupon) when they attempt to cancel or near their renewal date. In version B, proceed with the standard cancellation or renewal process. Randomly assign users to each version and measure key metrics such as retention rates, time to next renewal, and lifetime value.

Additionally, track user behavior within each version, noting how often the coupon is claimed and whether it leads to long-term retention. Analyze the results to determine if the loss aversion-based tactic significantly improves customer retention and overall business outcomes.

Puls's retention tactic improves user experience by providing additional value to customers and making the decision to continue their subscription feel rewarding.

By offering a $100 coupon for all their services, Puls creates a positive incentive for users to maintain their subscription. This can make customers feel appreciated and valued, potentially increasing their satisfaction with the service. The tactic also gives users a tangible benefit they can look forward to using, which can enhance their overall experience with the product.

However, it's important to implement this tactic carefully to avoid feeling manipulative. The focus should be on providing genuine value to the user rather than simply preventing cancellations, ensuring a positive and ethical user experience.