How TouchNote Tackled a Cancellation Surge & Increased Save Rate by 56%

As one of the first subscription card-sending services, TouchNote reinvented personal communication, enabling a powerful 100,000+ strong community to send handcrafted postcards and greeting cards straight from their phones. It operates across 180 countries, delivering 15M+’ connections’ and ranks as one of the fastest-growing European tech companies according to Deloitte Fast50 (2015), Sunday Times TechTrack (2017), and Financial Times 1000 (2018).

The Challenge: Caution Over Potential Subscription Adrenaline Wearing Off

TouchNote’s eCommerce store offers both one-time purchases and multi-tiered subscriptions for customers. Subscriptions for both monthly and yearly plans are managed directly from Chargebee, enabling customers to send cards periodically and at discounted rates.

TouchNote’s Plan Structure

As the pandemic-induced isolation started to weigh heavy, people worldwide sought authentic, tangible communication to feel closer to their loved ones. As a result, TouchNote experienced explosive growth in March 2020 and witnessed a doubling subscriber count in just a few months, increasing new subscription revenue.

However, a bulk of their subscribers preferred the yearly subscription plan (two gift cards/month for the year), which carried a significant downside risk: The likelihood of customers renewing their subscription post the first year could make or break their recurring revenue flywheel. It was imperative for TouchNote to optimize the cancellation flow and ensure these customers were satisfied to decrease potential cancellations.

“We acquired so many customers that the growth of TouchNote depended on keeping our existing customer base on renewal,” said Camilla O’Connell, Growth Marketing Executive at TouchNote.

The Solution: Test. Learn. Repeat.

Chargebee Retention (formerly Brightback) was already implemented and integrated with TouchNote’s tech stack when the business focus started shifting towards retention at the beginning of 2020. The TouchNote team used Chargebee Retention Audiences to separate their international vs. domestic customers.

TouchNote’s Chargebee Retention Cancel Page

To forestall any customer cancellation cliff, the TouchNote team began a strategic and targeted offer testing program. They tested different discount offers — 40% off, 50% off, and a $23.99 discount (roughly equivalent to 50% off). In addition, they included options to pause or downgrade to a lower subscription tier.

From July 2020, Chargebee Retention testing was front and center to give customers options and improve our save rates. It is much cheaper to retain a customer than acquire a new one, so this became a core focus for hitting our growth numbers.

Camilla O'Connell, Growth Marketing Executive, TouchNote

Chargebee Retention's analysis helped TouchNote to learn two key insights quickly:

1. Subscribers who were likely to churn had not used all of the “cards” in their subscription.

2. Subscribers were more likely to respond to a % discount vs. a $ off, even if the discount amounts are the same (50% off vs. 25 pounds off a year).

   ---

The Result: 56% Increase in Save Rate in Less Than 12 Months

Optimizations performed on Chargebee Retention's full-funnel testing plan across discounts, free cards, upgrades, and pause offers helped TouchNote improve save performance from 16% to 25% in a year.

TouchNote’s Save Performance trend in 2021

On further analysis, Chargebee Retention also found that the 40% discount offer performed almost identically to a 50% offer. This insight helped them decrease the lost revenue from offers for the same result.

50% annual discount performs the same as 40%

In addition to testing cancel experiences, the TouchNote team proactively engaged customers who were at risk of canceling their plan because they hadn’t used all their cards. A specific nurture journey was put in place to encourage these customers to use the cards in their subscription, reducing potential cancellations by addressing the cancel intent early.