What Is Voluntary Churn?
Why Customers Choose to Cancel (And How to Stop Them)
Voluntary Churn vs. Involuntary Churn
The two look identical inside a blended churn number and share almost nothing else. Voluntary churn is a deliberate choice: a subscriber assessed the subscription and decided it wasn't worth keeping or the need behind it simply ended. Involuntary churn is a failed transaction that the customer usually never noticed.
Splitting them apart is the first useful thing you can do with your churn data, because it turns one metric into two actionable avenues - product/pricing improvements and payment processing improvements. They have different owners, different fixes and different timelines. Lumping them together is helpful from a reporting perspective, but it obfuscates both when it comes to addressing root causes.
Common Reasons for Voluntary Churn
The reasons tend to fall into a few groups: subscribers who never reached the value they signed up for (usually visible within the first few weeks), subscribers whose underlying need ended (a project wrapped, a season closed, a team reorganized), and subscribers who decided the price stopped matching the value (which normally follows a change to one and not the other). Only the first and third are really product failures.
Asking customers why they're canceling is the only way to find out which group they belong to. In addition to the reason they give, it's worth analyzing their usage behaviors throughout their subscription lifetime, especially around the time of cancellation. A subscriber who picks "too expensive" after three months of no logins has told you two things: maybe it was a pricing issue, but more importantly, they had already decided to stop using the product (at least as it was) well before they canceled. The second piece of information is more useful and can be detected pre-cancellation.
How to Measure Voluntary Churn
The simplest approach is to subtract involuntary churn from your total churn. For example, if overall monthly churn is 5% and 1.5 points of that came from failed payments, voluntary churn is 3.5%. You can also count it directly, as cancellation requests over subscribers at the start of the period, and the two numbers should agree.
The awkward case is the subscriber whose payment failed and who then never came back. Technically that's involuntary, but practically they may have decided to let it lapse. Pick a convention, write it down and keep it - most arguments about churn numbers turn out to be arguments about that boundary rather than about the data.
How to Reduce Voluntary Churn
Work backwards from when the decision was actually made, not the day it was carried out. Three things move it: selling accurately so that a customer's expectations match the value your product can deliver, getting new subscribers to that value as quickly as possible, and then consistently and continually improving on that value (think of a subscription as being repurchased every billing cycle).
A steady decline in usage is the most reliable cancellation warning sign available. It tends to show up weeks if not months ahead of a cancellation action and gives good subscription businesses an opportunity to preempt that action. While good cancel flows can certainly save subscribers, by the time a customer reaches your cancel page you are typically fighting an uphill battle. The goal with a cancellation flow is to solve the specific problem the customer arrived with: a pause for the customer whose product needs are on hold, a cheaper plan for the one whose usage dropped. Obstructing the exit doesn't work, and it likely costs you the win-back opportunity.
Reduce Voluntary Churn
Turn cancellation attempts into retention opportunities with targeted offers.