What Subbly's Churn Report Reveals About Subscription Boxes

Liam gives the answers . It's as simple as that .

Now , we all know Subli is a pretty big subscription box platform . There are so many different niches using this platform and so many different kinds of subscription first businesses . Now , what they've done is they've compiled a really detailed report about churn rates across everything .

So if you have a subscription box business or any kind of subscription business , you're going to find this information really interesting . Now , it's a really detailed report with loads of really detailed graphs . So I'm not going to cover the entire thing in this episode , but what I will do is link to it below so you can go over and have a read yourself .

But on today's episode , I just want to cover a few things I found interesting from this report and share my thoughts . So let's jump into it . Churn is obviously a big part of growth . If you want to grow any kind of subscription box business , you need to take your churn and retention really seriously .

But this is especially important going into Q1 of each year . I've covered this previously , but this is because so many people in the subscription box industry do well during Q4 . Consumers they come out , they spend more money .

It's a great time to grow your business , but then when we get into January , things can change for some niches because a lot of consumers overextend themselves at Christmas . They spend a lot of money . Then they come into January and they're like new year , new me , I need to sort out my finances . I'm going to cancel all my subscriptions .

So yeah , if you want to build a really good subscription business , you need to have retention mechanisms in play , especially around this time of year . But anyway , let's jump into it . So the first thing I wanted to share is which I found really interesting . The first thing I wanted to share is which I found really interesting .

The median churn rate across all merchants and verticals and models on the platform was 7.44% . So that's really good . That's really good to see . If you have 7.44% churn , it means you're keeping people signed up for a very long time .

It means , on average , you're keeping people signed up for around 13 to 14 months , okay , which is really really good Around 13 and a half months , I think , think now for a direct-to-consumer business . This is excellent .

Obviously we're not running SaaS companies like email providers or subscription platforms or metric software or mission critical things where businesses need to use them to actually operate . If you're running something like that , you can keep people signed up for way longer .

But with a direct-to-consumer business , you will have higher churn rates , but you should also be able to sign people up a lot quicker and cheaply compared to a lot of SaaS companies . But 7.44 is really good to see . Now what they've done is they've broken down the average churn rate dependent on the country , and I'm going to go through this right .

So Netherlands has the highest churn rate at 16.2% , then it's Hong Kong at 16.1% , then it's France at 15.4% , then Australia 14.4% . Now Australia is doing quite well with subscription boxes at the minute . The market has really grown over there in the last few years .

Then the Philippines 14.3% , then Ireland my country at 14.2% , then the United States at 11.8% , then Germany at 10.9% , then the UK at 10.5% that's where we have the majority of our subscribers in BusterBox Then Canada 8.9% , then Denmark 8.3 percent and then New Zealand at 5.2 percent .

So you can see that this varies a lot depending where the customers are based and a lot of this depends on cultural factors , customer behaviors . The average person earns in each of these countries .

I know if you're targeting consumers with a lower average salary , it can be harder to get them to sign up to a subscription and it can be harder to keep them because they simply don't have as much disposable income . Also , the fact the Netherlands has the highest churn may be down to how they process payments over there .

I know it's a bit different compared to other countries and I remember hearing about it um a few years ago from somebody funny enough with a dog subscription box and I was thinking in the back of my head that is crazy . I don't know how you can have a good churn rate if that's how you process payments .

The next point I wanted to jump into is churn by stores , product category . So I'm going to read out what they have here and then I'll share my thoughts . Our subscription verticals reveal interesting patterns in customer retention .

Arts and DIY leads with the lowest churn rate , reflecting how customers who invest time and resources in creative pursuits tend to stay longer . Pet-related subscriptions follow closely behind , driven by the strong emotional bonds between pet owners and their animals .

While , surprisingly , we found fashion and health-related subscriptions generally show higher churn rates , fashion shows a broader range of churn rates and a higher peak , including more volatile consumer behavior in this category . However , since the median churn rate remains normal , this pattern may simply reflect that purchasing behaviors around fashion are more complex .

For instance , customers want to try to close on and returns are more common . Health-related subscriptions generally show higher churn rates compared to food and beverage , despite their related nature . This suggests consumers view health products as more optional than food .

However , the relationships are complex , as health-conscious consumers often consider food and nutrition integral to their health routine . So I'm not surprised about arts and DIY having the lowest churn rates . They're very passionate consumers and the product is actually being used each month . It has utility .

They're completing projects , it's not just a load of random products being dumped in a box . Pet related subscriptions fall on closely behind in second Doesn't surprise me either , because dogs and pets in general are great customers . They never give out about anything . They're always happy . You can literally give a dog anything and the dog will be happy .

The owner , on the other hand , may not be happy for some reason , but if the box makes the dog happy overall and the owner isn't happy about a certain product or something , they're probably going to let it slide and they're going to probably pay for a bit longer . With fashion it's completely different , completely different .

If there's something wrong with some of the products they don't fit , they're the wrong style , they don't suit the person , they don't like them for whatever , they'll cancel straight away . So I'm definitely not surprised about that . Now the health related subscriptions show higher churn rates compared to food and beverage subscriptions .

That's interesting , really interesting , because I know for a fact that food and beverage , especially meal delivery kits like HelloFresh , blue Apron and all the other ones that have popped up in the last few years , I know in general mail delivery kits have a pretty high churn rate and if you look into any of the data that's shared by HelloFresh or Blue Apron ,

that will back up what I'm saying . It's a known problem with mail delivery kits . The churn rate can be high . Customers have very , very little loyalty . What happens is everybody has really good offers on the first few boxes . Customers will sign up for the offers and then they'll jump between the mail delivery services .

So it can be quite a challenging business , not saying impossible , but definitely a challenging business . The next point I wanted to bring up now I actually found this pretty surprising and interesting , so I wanted to share it the relationship between churn and average order value .

So conventional wisdom suggests that higher price subscriptions would face greater customer churn , as people are typically more cautious about maintaining expensive commitments . However , subli's data reveals a fascinating insight there is absolutely no correlation between average order value and churn rates .

This means that customers are just as likely to maintain their subscription whether they're paying $10 or $100 per month . Really interesting stuff . Now in BusterBox we have seen a bit different compared to that . Our price does influence our churn rate .

When we have a higher price , even by a few pounds , that can make a big difference to our churn rate , because customers don't feel like they're getting value for what's in the box .

Like they're getting value for what's in the box , whereas if it's a lower price , it feels good value , it's under the threshold that they're willing to pay for a monthly service and they stay signed up a lot longer .

So I say this probably means in general and there can be different niches and different locations where the price does have a big impact on the churn . Now , the last thing I wanted to share with you is churn by merchant size , with different subscription models . Larger businesses tend to have significantly lower churn .

Among them , memberships boast the lowest churn rates , whereas subscription boxes demonstrate the highest churn among larger businesses . This is obviously because to get big , you have to have some kind of product market fit .

You will find it nearly impossible to scale up if you don't have any kind of product market fit and there isn't any real demand for your subscription box . If you have product market fit , you're obviously going to keep people longer and it makes it easier to scale up . So yeah , it rolls hand in hand . Now , I hope you found this episode interesting .

There's a lot more information here and , like I said , I'm going to link to this report in the show notes head over . Take a read of it and you'll definitely learn something from it .

Now we'll be back next week at the exact same time and , as always , if you have a question want answered on the show , head over to subscriptionboxresourcescom , join the free facebook group and post your question there . And , just as a reminder , subscription box experts opens on the 11th of february . I'm only opening it to 50 businesses . That's it .

There's already a lot of people on the wait list . If you're interested , head over to subscriptionboxexpertscom right now and join the wait list and I'll help you make 2025 the best year yet in your subscription box . Have a great day and chat to you next week .