5 tips to improve your subscription renewal rates

Michaela Munitzk
04.02.2022 | 5 min

What is a subscription renewal rate and why should you monitor it?

Your subscription renewal rate is the opposite of your subscription churn rate. Rather than tracking how many customers cancel their subscription, you determine how many customers extend their subscription at the end of a period. In other words, the higher the renewal rate is, the stronger the indication that you are delivering value to your customers. Keeping track of this KPI helps you to recognize customers’ behavior early and their level of satisfaction or dissatisfaction with your product.

If the renewal rate is declining, you should consider changes to your product offering as well as features.

It is also possible that some of your competitors have significantly improved their offering that your customers are willing to switch provider. Make sure you keep an eye on your renewal rate to measure the satisfaction of your customers and secure the longevity of your product on the market.

What is a good subscription renewal rate?

Naturally, there is no “one size fits all” answer and you will need to find the specific subscription renewal rate that suits your product, price range and subscription length. However, as a rule of thumb, a renewal rate of 80 percent is a good indicator that your customers are satisfied with your product. If you have you reached this value, you now need to make sure to invest in customer research and product development to push toward 100 percent, where all of your customers renew their subscription.

From my own experience, pricing
is the most obvious factor
for customers to
switch product.

But people are attracted to popular brands, especially if friends and family use the same brand. Loyalty also increases if it is the first product of a kind they have subscribed to and if you continuously grow with the market and your customers’ expectations.

How to calculate your subscription renewal rate?

In order to spot any changes, you should monitor your subscription renewal rate on a regular basis. Have a look at weekly, monthly and yearly changes. You can calculate your subscription renewal rate by calculating how many people have renewed their subscription divided by your entire customer base and convert the result to a percentage. Assuming you have 100 customers and 87 customers renew their subscription, you would have a subscription renewal rate of 87 percent.

(Subscribers renewing their subscription / customer base) x 100 = subscription renewal rate

(87/100) x 100 = 87%

5 tips: How to increase your subscription renewal rate?


  1. Understand success in the customer journey

To improve the experience and overall satisfaction of your customers, you need to understand their touchpoints with your product. Moreover, you have to be aware of the pain points they are hoping to solve with your product. And of course, you need to measure how well you are solving these pain points. You also want to know what keeps users engaged with your product. Being aware of how your customers interact with your product enables you to work on the right features.

My personal tip: Ask yourself how often users log in and what they are trying to achieve, as well as what is important or perhaps frustrating for them.


Collect, collate and analyze data

Now that you know what you are looking for to understand the success of your product, you have to start finding answers. Especially if you are new to the business, qualitative data can help you more than quantitative data. At this point, you want to find out why things are happening. Only once you are clear on that can you move on to quantitative data.

The hardest but most effective task you can do is to start talking to your customers.

With the help of surveys, you can ask more frequent returnees for feedback and opinions on your product. Also, follow new customers through the onboarding process to discover poor user experiences early on.

One of the most beneficial resources for quantitative data is actually located within the company.

No one knows the pain points of your customer base better than your team in customer support. Make sure to regularly connect with them to learn about frequently asked question from your users. Remember, if one user is annoyed enough with your product to contact customer support, there are probably ten more users who share this frustration. By solving these obstacles, you will increase satisfaction for many customers.


Target likely churn candidates

When you know how to identify a successful customer journey, backed by data, it is a lot easier for you to find customers who are more likely to cancel your product. Possible signs are that they are not using your product frequently or only using part of it.

From here, you can try the following:

Drive engagement by targeting them with specific content that explains your product and its value more effectively. Try to convince them to return to your product more often. Once you have done this, you can offer them individual renewal options to increase the likelihood they stay with you.


Keep customers happy

The constant threat of losing subscribers is also your biggest motivation to improve. Make sure to continuously enhance the key features for why your subscribers joined in the first place and more importantly, don’t mess them up. At the same time, you need to stay ahead of the competition by introducing new functionalities. However, make sure to focus on developing something of value, instead of creating lots of random and confusing features with a poor user experience.


Switch to direct debit

One important factor that can lead to involuntary churns are soft payment failures, such as expired card information, reaching a maximum balance or having insufficient funds. Additionally, hard payment failures caused by stolen cards or closed accounts can also result in canceled subscriptions. Fortunately, this can be solved by offering a direct debit payment method for your subscription service.


If you follow my 5 tips for improving your renewal rate in your subscription business, you'll be able to build and grow subscriptions as a promising part of your business. Do you have questions about the Renewal Rate or want to give me feedback?

Feel free to get in touch - and let me know if you have any specific questions about your subscription business. I'll be happy to address those questions in an upcoming blog post.

Michaela Munitzk
Director Product Design