Growth HackHow Groove increased Annual subscribers by 10%

Groove make customer support software. You might have seen their support widget on the bottom right of some websites.

Measure

Groove customer support team started to get customers asking about changing to annual plans. They figured that a lot of their customers just didn’t know about the annual pricing option.

Like a lot of SaaS companies, Groove offer monthly and annual pricing. The annual pricing is about 20% cheaper than the monthly pricing.

Annual subscriptions have lower MRR because of the discount, but often have higher Life Time Value due to lower churn rates. Annual subscribers can only unsubscribe (or have their credit card fail) once per year. This means that their maximum monthly churn rate is about 8.125%.

Anyone who stays on an annual plan for more than one year has a maximum monthly churn rate of 4.06%.

Find the bottleneck

Since customer support was getting questions about changing plans, Groove figured that a lot of their customers just didn’t know about the annual option.

Experiment

Groove emailed their customers and told them they could save 20% by upgrading to an annual plan.

Some of them did it. This email increased their annual subscriber count by 10%.

Next Steps

Progressing happy monthly customers to an annual plan could be automated. This might mean emailing monthly customers who are still active after a few months and letting them know about the annual discount. Alternatively, you could put some banners in-product talking about the annual plan discount.