10.3. Pre-cancellation discount:
Joshua Kye avatar
Written by Joshua Kye
Updated over a week ago

Controlling churn rate means keeping the churn as low as possible. We have already discussed some flows via which we can retain the customers from cancellation here.

However, there is one aspect that needs to be discussed in detail, and that is the pre-cancellation discount. When customers are offered a discount, there is an 80% higher chance they will retain their purchase, especially in the case of a subscription purchase.

How to define a pre-cancellation discount? Let’s discuss it step-by-step:

  1. The first step is to calculate a buffer on how much discount you can easily offer, and when offering, it is not causing any issues with profitability. A merchant needs to identify the break-even point of price for the product and then add 15-20% to it. Whatever amount you will be getting, you can leave the rest for discounts.

  2. Once you have decided on the discount percentage, you can create a discount code in Shopify that can be provided to the merchant or we can manually apply the discount on the merchant's contract.

How to make sure customers reach out?

As discussed earlier, the provide cancellation instructions feature of cancellation management shows the customer a message where they are usually asked to reach the merchant (or their team in order to proceed with a cancellation).

Here is an example message that can be sent:

“We don’t want you to leave. Please reach out to us at abc@abc.com to avail a discount of 20%”

You, as the merchant, can modify this message through either text or, if you have a developer on your end, custom HTML. You can also reach out to our merchant success team if you require assistance.

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