“These customers didn’t actively go in and cancel their subscriptions, but by default, they are now in this weird state where they have not canceled, but they’re not active,” he said. “We have to really understand our numbers and delineate between who is an active paying customer and who is inactive.”
KONG Box has adopted a solution to this from a payment provider that kicks in when customers update their card information on other platforms. It then updates, the card details on KONG Box’s network, and as a result, 600 credit cards are updated monthly. The provider works with card networks and automatically attempts to update saved card details whenever a customer receives a new card to replace an expired card or one that is reported lost or stolen. The other way to combat churn, Probst said, is to allow customers to pause their subscriptions.
“They could pause indefinitely, which we don’t want them to do,” he said. “But customers must contact customer service, and we will implement a three-month pause.”
Answering Customers’ Calls
KONG Box is integrated with Shopify, the Canadian-based eCommerce platform for online stores. The network is seamless, but Probst said there are some limitations. If a customer orders a subscription but wants to add an extra item, it creates a challenge, for example.
“It becomes tricky — a customer can’t just add something into the box,” he said. “Some competitors or other providers do allow for those kinds of customizations. We’re trying to do some workarounds, where a small item can be added but won’t disrupt the volume metric of the box. That’s one of the struggles that we have: We can’t upsell to add to the box.”
KONG Box has established a separate Shopify site for individual purchases to help meet the demand for specific items. This appears to be working: Probst said the company is profitable this year and expects to make back all the money lost through the original promotion by the close of 2021.
“Obviously you can’t turn around an ocean freighter quite as easy as a speedboat,” he said. “But we’re definitely course-correcting.”
The subscription services sector has not only survived but also thrived amid the pandemic as consumers more often prefer to receive goods conveniently at their doorsteps. Subscription companies that partner with seamless payment networks and work to maintain retention from different angles will be able to keep the ball rolling.