How to tackle New Year’s subscription churn

The first weeks of the new year are filled with resolutions: starting that new hobby, eating more plant-based, or becoming more financially savvy. Unfortunately, that savviness often starts with a quick fix: canceling subscriptions or requesting refunds for apps you signed up for with the best intentions.

Aside from saving money, it also spares you the constant reminder of last year’s failed resolutions. That workout app you said you’d use daily but opened three times? Bye! That to-do list app with one lonely grocery list? Gone! The audiobook service filled with non-fiction books you’ll definitely read at some point? Better luck next year!

It’s a familiar pattern: subscribers sign up in January, full of New Year’s resolution energy, only to cancel—or request refunds—weeks later when motivation fades. For apps in categories like health and fitness, this seasonal churn hits hard. RevenueCat data shows refund rates spike sharply in January, as some users bail on their resolutions just a week into their subscriptions. (More on this later.)

The real challenge? Keeping those resolution-driven customers engaged beyond February instead of losing them after a few weeks.

While I’d recommend this subscription cleanup to all my friends personally, it’s far less helpful from a business perspective. If you work in app growth, you not only need to nurse that two-day hangover from New Year’s Eve, but you’re also facing the lovely challenge of new targets amidst an influx of cancellations and fickle January joiners — great. Happy New Year, I guess…

This is why I’ve always been a fan of the ‘end your year strong’ approach. It may be tempting to write things off to the new year and settle into ‘Holiday Mode’ early. But December and 2024, aren’t over just yet. I urge you to approach the challenge upfront, and I’ll tell you exactly how to do that.

Here’s everything you need to tackle for these final weeks of the year and how to ease the subscription hangover.

They aren’t gone until they’re gone 

Let’s be real: it might be a bit late to convince someone who’s used your app once or twice to stick around for another year. That time has passed. But there will also be another group of people worth convincing: the casual users. They’re not solid fans, so when the new year rolls around, they’ll stop and ask themselves: should I stay or go? But they’re not gone until they’ve pressed the cancelation button.

If possible, you want to use predictive modeling to spot churn early on and understand, based on behavior, what indicates they might be likely to churn. 

The most common churn signals include:

• Shorter session times
• Reduced frequency of usage
• Reduced usage of popular features

Another group to watch out for is those that have turned off auto-renewal, as they can easily slip away in the new year. 

Now if you don’t already have re-engagement flows (via email, push notifications and in-app) in place for them, this is your chance to give them a positive nudge. Segment them out and push them to consume content you know they’ll love, or take this chance to highlight everything new and coming. 

But please don’t take the Duolingo approach and go too hard on the emotionally blackmail them to stick around, no one needs that at the start of a new year: 

Credit: Rosie Hoggmascall– “20 days of emotional blackmail from Duolingo”

So what should you do instead? Instead of emotional blackmail, try some win-back flows, like these great ones using OneSignal and RevenueCat. Across them, you’ll notice that they:

• Identify what is a churn risk for them, e.g., a certain action not being taken, short session duration
• Implement personalized messaging and offers that focus on delivering value
• Combine email and push notifications rather than just one of them

If you can offer January exclusive content or share upcoming new features, that would be a great way to encourage users to stick around. We’ve all fallen victim to FOMO (Fear Of Missing Out) at one point or another, so elicit these feelings in users. We are often willing to offer considerable discounts to entice new customers, but we don’t do enough to reward loyal customers. 

We assume that they’ll stay once they’re through the door, but we’ve seen enough to know that this is certainly not the case. I urge you to fight internally to offer something special to those potential churners. Make them feel special this holiday season.

Keep the good kind of resolution customers

New Year’s resolutions aren’t always a bad thing for apps, before we swear off them entirely and start a campaign against all resolutions. While some might drive users to delete apps, other resolutions may nudge them directly into your hands. Alongside those canceling, you may also see a surge of new subscribers — New Year, New Me, and all that jazz! 

But once again, just because they’re in the door, that doesn’t mean that they’re ready to unpack their bags and move in. Instead of seeing this as something negative, I urge you to see it as a positive thing. The dropoff in that initial period is often the highest, and thus, it’s a major opportunity.

Credit: The Stages of Retention – Created by Daphne Tideman and Thorsten Strauss

So, take the time to look at how you are re-engaging those initial customers in a different manner. Something fun to do in this period is highlight resolution success stories with your app. This is more applicable if your app is a typical resolution app, such as a meditation app like Headspace or a workout app like Fiit. With this, you show them the long-term benefits they could achieve by staying consistent. 

For all my hate for Duolingo’s guilt-tripping, their focus on building a streak is ideal for keeping New Year’s resolution customers on board. This gameifies the experience and gives customers something to lose, igniting their competitive side. That competitive side is vital for resolution apps. 

Your points of focus in onboarding largely depend on what type of app you are. There are three typical approaches for a successful onboarding:

1. Function-oriented onboarding – Here, you focus more on the features and how to use the app. This is usually for an app where the features drive the value. The app may also be more complex to use and thus need further explanations, e.g., e-learning apps and financial management apps.
2. Benefits-oriented onboarding – Here, you focus on lifestyle improvements because your app is easy to use, so it’s about convincing them actually to use it, e.g., shopping apps and streaming apps.
3. Progressive onboarding – Here, you share step-by-step instructions on how to use the app with a more gradual onboarding process, ideal when your user will start with basic features and gradually use more of your app, e.g., language learning apps and coding apps.

No matter which onboarding approach best suits your app, all will benefit from integrating your data to ensure they are triggered at relevant points. Common signals for the onboarding flow are: 

• Time since the last session
• Trial duration left
• Active trial or free users to send offers

If you are using RevenueCat, their integration with OneSignal can help you set this up seamlessly. You’ll be able to trigger users at the right moments and turn them into fans before the resolution deadline is up.

The point of cancelation

Your app’s growth manager is not the only one dreading the new year mass subscription unsubscribe. Your customer care team probably is, too. While you’re worried about the growth of the app, they’re focused on getting through each dreary January day. They’re nervously awaiting a mass of cancelation requests and, even worse, refund requests to handle. These are never simple and fun requests, I can assure you. 

Again, the proactive approach is key. Failing to plan is planning to fail — it’s a cliche, but for good reason! First, double-check that subscription reminders are clear; not a bit clear, not clear for people as familiar with your app as you are, but clear for complete strangers. While that might not help your immediate churn, it ensures there are far fewer angry users demanding refunds and leaving negative reviews if their New Year’s hangover is hitting them extra hard. 

Secondly, review your cancelation flow to ensure it is set up effectively. Walk through the flow yourself and ensure you build in surveys and offers to deflect and understand churn. If you are using RevenueCat, you can use the Customer Center feature to construct this. You can set up a survey that pops up when customers tap ‘Cancel subscription’ and attach promotional offers to the responses to reduce churn. For example, you can offer a 1 month free to a customer who replied “Too expensive” to the cancelation survey. This makes them feel heard and will give them a moment of hesitation — that moment is all you need!

With Customer Center, you can prompt feedback from cancellers and offer discounts to get them around. 

For some forms of feedback, such as technical issues, you might intentionally push them to customer care first to try and see if you can solve the problem. Work with customer care on a special offer that they can hand out during that period, which can also help them to reduce churn further potentially. This also gives your customer care some agency in the matter.

I recommend running user tests around your cancelation flow if you have the time. Here we come across the same issue as with offering discounts only for new customers. We spend so much time perfecting and testing our onboarding; why don’t we do the same with the cancelation flow? You could even start this on a small scale and ask acquaintances who don’t know your app to work out how to cancel their subscription directly through the app. If they’re struggling, it’s likely your customer will be extra frustrated as their money is on the line.

Your goal here is simply to understand:

• Is the flow clear and easy to use without needing customer care support?
• Are the survey options complete and optimized to discover why people are churning?
• Do the promo offers effectively convince customers to stay?

There is no doubt that it’s harder to get a customer back when they’re on the precipice of canceling. But it’s easier than after they’ve gone through the cancelation, that’s for sure. With the right win-back flow, you can deter those who are being a bit too enthusiastic in their canceling spree. 

Preparing for the refund surge

No matter the extent to which you communicate to someone that their subscription will renew, there will always be refund requests. It’s merely a fact of life in the app industry. So what can you do to prepare for this?

First and most importantly, be transparent about refund policies, such as when users can or can’t get a refund. Ensure there is clear information (if there isn’t already) in your Frequently Asked Questions. Transparent communication can make the difference between a good and bad review. You want to clever common questions like:

• When are you eligible for a refund
• How to request a refund
• How long does it take to receive a refund

Second, spend some extra time analyzing refund trends. Refund rates often spike during specific times of the year. For example, RevenueCat data shows that refund rates for health and fitness apps jump by 20% in January, peaking at 2.4% during the third week of the month. This reflects users canceling subscriptions or requesting refunds as their New Year’s resolutions lose steam. Understanding trends like these allows you to plan targeted campaigns to re-engage users before they churn.

Don’t just stop at the data. Meet with your customer care team to brainstorm what might be driving refund requests, whether it’s app updates, unclear policies, or seasonal trends like January churn. I’ve said it before, and I’ll say it again: your customer care team is the greatest untapped resource in your brand.

Third, a refund automation system should be set up. The challenge, especially with Apple refunds, is if they aren’t responded to within 12 hours, Apple gives the refund. And let’s be honest: some people are cheeky. Even if they’ve used the app a lot, they’ll try to get a refund, so you want to have the systems in place to prevent that. I read a forum about refund issues on the Apple App Store and Google Play Store. A frustrated game app developer was seeing users purchase a subscription, play the whole game in a day or two, and then request a refund… Ouch. 

However, you can set up a refund automation to determine whether or not to grant the refund based on their usage and how long they’ve been a customer. Responding to Apple refund requests manually—providing necessary consumption data such as subscription start date and usage history—can be time-consuming and distract your team from higher-value tasks.

For example, with RevenueCat, you can automate this process by sending Apple the relevant consumption data, along with your preference to accept or decline the refund. This gives Apple the context they need to make better, more informed decisions while reducing unnecessary refunds and customer wait times.

This is well worth the effort. Dipsea, a spicy audiobook app, used RevenueCat to reduce refunds from 3% to 1.9%. This helped them significantly reduce refund costs caused by misuse or unreasonable requests.

A proactive approach is a must

If you take one thing away from this article, let it be that a proactive approach is necessary. Don’t wait to deal with the fire, avoid it happening in the first place! There is so much you can do to reduce the impact of a subscription hangover:

• Use re-engagement flows to keep longer-term customers onboard
• Build a strong onboarding flow that is customized based on user actions
• Ensure your cancelation flow is customized to the reason they want to cancel
• Have a win-back flow in place for those canceled customers 
• Have a clear policy for customers around refunds 
• Use a refund automation to reduce Apple’s automatic refunds

The best part is that most of this work will benefit you not just in the New Year, but in the longer term in terms of improving your retention. You’re setting up the foundation for the entire year to come, but you’ll definitely get great use out of it in January. Sure, some messaging may change throughout the year (e.g., resolution stories and new features are very timely content). Still, most can be used throughout the year to reduce your cancelations and lost revenue to refunds. 

Instead of focusing only on new customers in the new year, focus on keeping existing ones and doing everything you can to ease their experience. The perfect final project before you take a well-deserved break.