Company Name Teardown: Hulu
What the company does: TV Show Streaming Service
Who they target: Average consumer
Price Point: Starting at $6.00 / month
Cancelation teardown: Monthly subscription
Hulu is a well-known TV show subscription service, in competition with Netflix. They have nearly 57 million paid subscribers domestically (and 130 million subscribers worldwide) and given they run on a subscription model, they obviously have powerful incentives in place to minimize customer cancellations. Assessing their cancel flow should inform us on best practices in a replaceable, subscription product business model.
As a user, on page 1, you are first met with a suggestion to temporarily pause on your subscription. You have the option to pause for up to 12 weeks (3 months), and you will not have access to Hulu, or be charged, during that period.
This gives users an out from the charges, or subscription, if they feel they aren’t using it, but keeps them on the hook long term. It encourages the consumer's bias towards the feeling that they may need the service in the future.
At stage two, the consumer is met with a simple, unavoidable feedback form, forcing the customer to indicate the reason for their cancellation. This is to collect data on Hulu’s failure to maintain value to the customer, and the wording “Where did we go wrong” may be designed to make customer reconsider their cancellation, if they don’t feel they have a strong enough reason.
All the feedback options lead to the same page, except for “I haven’t found enough to watch”.
If the customer selects “I haven’t found enough to watch” in the previous step, they are prompted to look into other premium Hulu add-ons, with more content options that the consumer may have not been able to find on Hulu’s main service. This encourages further use of the platform and actually upsells the user.
If any of the other options were selected in step two, or the customer clicks “continue to cancel” on the last step, they are brought to a cheaper offer. Two weeks, for free, on the lowest cost subscription plan. This offer is shown even if the customer is already on the basic plan. This offers the customer a cheaper option to maintain access to Hulu’s services, so Hulu would lose revenue, but maintain some value from the customer.
There is a separate option to “See what you’d miss”, before you complete cancellation.
If the consumer selects “See what you’d miss”, they are brought to a 15-second video advertising the benefits of Hulu. The goal is to illustrate the value of the product, and remind the customer what they’ll be missing out on. This decreases the eventual cancellations of some consumers that didn’t fully realize what Hulu offered.
Finally, after fully going through with the cancellation, the customer is offered continued access to their account, and Hulu, for the remainder of their billing cycle.
Overall, Hulu simplified their cancellation cycle and relied on its brand strength and exclusive offers to maintain customer loyalty. They advertised these advantages even when customers attempted to cancel, but only offered helpful feedback on the customer’s cancellation if they couldn’t find enough to watch through their platform.
Offering feedback on a technical issue, or advertising the “Help Center” more overtly, may have led to fewer cancellations. Offering different subscription plans given the customer’s answer may have also led to fewer cancellations.
So how did Hulu stack up?
1) Respects customer: 7/10
2) Opportunity to retain: 8/10
3) Collects valuable feedback: 5/10
There are several principles a Saas product can implement in their design and user experience to reduce churn.
Understanding the average lifetime value of a customer (LTV) is one of the most important steps in building a successful Saas.
Whether your a well seasoned Saas or you just collected your first dollar, adopting the appropriate accounting method can make or break your company.
With Raaft, you can collect feedback from customers who have used your product and offer them custom responses to keep them around longer. Improve your customer experience and lower churn.