087: Membership cancelation strategies – with Stefan Stefansson

Stefan Stefansson is the co-founder of WithSara, a membership that supports women and provides fun, effective, and quick workouts from home. In this episode, he joins Ward to discuss how to deal with membership cancelations.

✍️ Show Notes

📄 Show Transcript

This transcript is computer generated, please excuse any errors 🙂

Ward Sandler: Welcome, everyone! Today I’m interviewing Stefan Stefansson, the co-founder of WithSara, a platform supporting women to get a fun, effective, and quick workout from home, featuring his wife, Sara Olasfdottir. Stefan is also the CEO of Sensivo, a venture-backed startup in Stockholm; he has been on the founding teams of many successful software startups and has held various key positions in Icelandic companies. Stefan, welcome to the Membership Maker Podcast; we’re thrilled to have you here.

Stefan Stefansson: Thank you, Ward. I’m very excited to talk to you about all things membership,

Ward Sandler: You’ve created a very succesful exit form to avoid cancellations, and you now have a very low number of users canceling their memberships. How did you come up with the idea for it? And what’s important when creating an effective cancellation experience?

Stefan Stefansson: I think this is the Holy Grail of running a successful subscription service or a membership community. And what we did after talking to so many of our members is that they may be not one to cancel, but had to cancel because, the options that they needed were not available at the time and know by this, I mean, a member might contact us and say, you know, I broke my toe, I’m pregnant, I can’t work out because of this or that, or I’m going on a Holiday. There are so many reasons why people might not want to cancel, but have to cancel because that’s the only option that option that they have. So we started looking into how would, and if it would be possible to somehow implement this pause feature into the experience. And like I mentioned earlier, you have to look at what the big players are doing and the companies that you look up to, and we saw this past feature functionality being available elsewhere as well. And with the flexibility of the MemberSpace platform, we realized that we were able to go into the wording and the text that was present to the users while they were canceling and alter it just a little bit. So it made this option available. So if I, if I remember correctly, you know, the default options to a MemberSpace admin is you either allow your members to send you some kind of a support question or you allow the members to add a discount to their membership for a limited time, or you allow them to cancel. So what we realized that this middle part could be framed a little bit differently to provide the same results. So instead of saying, why don’t you have a 20% discount and continue on with a membership? We just said, you know, why don’t you pause your membership for two months? And we don’t mention that this sculpture would be provided on the backend a 100% discount for two months. That’s just a coupon code, I mean, we had the coupon code before and the coupon code after, and we are seeing a many folds increase in the usage of that coupon, instead of just applying it as a discount. So just the wording there changed everything. And then we tried to just apply just a little bit of psychology and in a hile you’re deciding if you want to cancel, for example, we say ‘Stop working out and cancel’ So you’re, you have to make two decisions there. You have to make the decision to stop the subscription, but you also have to make the decision to stop working out, which is, you know, maybe a, a step that don’t want to take, if you put it in that perspective. So it’s, it’s just something that we are testing and then, and so far it’s going well as proving to be good for growth. Yeah.

Ward Sandler: I mean, it’s fantastic. It’s funny. It’s pretty meta actually. Cause after I saw your post about this cancelation alternatives, this customization that you made it inspired me to change how MemberSpace does our own cancellation, right? Because believe it or not, some of our customers canceled too, so I changed the wording to be very similar to what you’re doing. We didn’t quite use the word pause because I’m going to ask you about that too, in a second, but I did change the ctual, I just want to cancel part. I changed it to say, you know, uh, cancel it, stopped my membership or closed my membership and, and canceled member space. So it’s like, it makes you kind of just think like is that really what I want to do? And it’s not a trick, it’s just a way to kind of position and it differently, especially if someone’s maybe feeling frustrated at that moment, or it’s like, all right don’t need to actually stop my membership so that alone is good. But I want to ask you a question about pausing, right? So different people imagine different things when they hear the word, ‘Oh, I want to pause my membership’. How would you make it clear to folks, at least at all right, ‘The pauses for two months, and then it automatically will renew after two months’ Do you make that clear somewhere?

Stefan Stefansson:I can’t remember the exact wording right now and if the option provided an additional description of what you’re about to do, but to me, while I was looking at it, it looked pretty clear, but I would have to double-check on that, but that’s a good point.

Ward Sandler: Like, have you had anyone who after the two months has elapsed of the pause period, and now they’ve, and now the subscription started again, is that, has that occurred for anyone yet? And have you heard any feedback from folks, like if they were confused or didn’t expect it to work that way?

Stefan Stefansson: No, we have not received anything, in that tone, but one thing that does happen then it’s, you know, it’s the limitation of this workaround that once you utilize the past, you can basically just pass at one time, uh, because that’s how MemberSpace is structured, the setup that I have does not include the function in it. So the wording on the cancellation and the cancellation flow, still frames that little bit like you can cancel, okay, sorry, can pause, even though you were, you can’t. Because you already have and use that feature.

Ward Sandler: Yeah. I see what you’re saying. Cause the way MemberSpace works is once you cancel, once you’ve used a cancellation alternative, whether it’s extending the trial, whether or the coupon I’ve applied is not pausing it, that those don’t show up again. Yeah, I hear what you mean. It’s something that might get built out more in the future, but, so just to bring it back out a little bit more general for folks, not everyone listening is using MemberSpace. Do you do anything else around cancellations or users exiting? Do you have like an exit survey of any kind? You try to follow up with people after they’ve canceled?

Stefan Stefansson: Yes. Of course, a lot of the people that do cancel provide that the detailed description of why they cancel, and this is very important just to get a sense of, get the red line. What, what is the reason for the churn? Is it price or is it a lack of features? So, there could be so many aspects. So we do monitor that, and quiz people on that, and we also try to stay in touch with the canceled members and when things are right, when we have maybe something to share with them, we do communicate with them. And there’s habits very often that kinds of member research tribes, and they jumps back and forth and becomes a member again.

Ward Sandler: I think there’s a fine line to walk between someone’s canceled and you’re trying to follow up with them in a helpful way, but not a pushy way. Like for example, for us, we continue to send folks, an email about new features that are released, because they initially opted into it. And just because you canceled doesn’t mean, you know, you will want to hear what’s new cause maybe you canceled because it was missing a feature. And you can always unsubscribe, but that’s kind of a nice, subtle way to let people know, ‘Hey, this thing that you used to use, you used to pay for is improving and there’s new things being added’ And then basically you’re implying that maybe you should give it another try and you don’t need it without explicitly saying that, which could be annoying. So that’s one option to consider, just like a, ‘Hey, here’s what’s new in our product or our service or our community’. Those types of emails for folks that have canceled might still be useful and interesting.

Stefan Stefansson: Yeah. And then there’s also the question of, are you running some kind of a place or a community where people can continue to be engaged with what you’re offering after the cancel? So I don’t know, I haven’t canceled my MemberSpace yet, so I don’t know if I will be kicked out of the member space community, but I know if I’m allowed to stay, it still provides a way for me somehow to the products and the things that you were mentioning, like new features. And the same goes with everybody that is running Facebook groups or, you know, any type of forum to discuss with members, keeping them in those groups provides a way for you to catch them again if they, if they’re up for it.

Ward Sandler: Thanks for taking the time to talk with us, Stefan; we really appreciate it. Would you like to share any resources or recommendations for folks trying to learn more about WithSara?

Stefan Stefansson: Just a recommendation, if you’re interested in what we’re doing, and I want to see examples of what we talked about, you can go to WithSara.co to learn more about us! And also, I really recommend reading a little bit about the things that Jacob Nielsen has published on Usability and User Experience.

Ward Sandler: Excellent. Thank you.