Zombie users are paying subscribers who pay you but don't use your product.
They get counted as active subscribers, when in reality they should be considered as churned subscribers.
How to measure zombie users in your product?
Step 1 - Identify your engagement metrics
This could be anything like pageviews, sending a newsletter (eg: Mailchimp), creating a draft (Jasper), sending a message (Slack), or creating a board (Mixpanel).
Step 2 - Create a filtered view of your users
I like to keep my annual and monthly subscribers separated but you can cluster them together. Here's a rough idea of how that could look like.
Then sort the report by value.
Customizing your subscription health
1. Using % trends
You can add an event with all active subscribers. Then use a formula to find the percentage of healthy active users or zombie users (eg: zombies / total subscribers%)
2. Segmenting further
You can also create three groups: healthy, at-risk, and zombie. So, you can try to win-back at-risk users.
This is important to do because Zombie users might come back later and request for a refund. They might also not be happy with the brand.
What should you do about zombie users?
I really like what Slack does with Zombie users. As soon as they track that a user has not been active in the past 30 days, they don't bill the workspace owner.
Why exactly is Slack doing and isn't doing?
1. Always charge for 1 user even if the user becomes inactive.
This is probably because Slack has a cost to serve in terms of data storage costs for the workspace.
2. Don't refund the charge but instead add a credit
They aren't refunding for the month. Instead, they're saving a little bit of cashflow plus ensuring that the customer's bank statements remain clean. I don't like using a lot of payment apps like Google Pay because they offer cashbacks. Cashbacks ruin my account statements.
Why is this a good billing strategy for zombie users?
People often hesitate to start a subscription because they're worried they will forget to cancel it. This pricing decision reduces friction to conversion. It's also good for brand and word of mouth. Clearly, I'm writing about them :)
And it's also good for the customer. They aren't shocked or feel like an idiot when they see their statements and realize they forgot to cancel.
But I acknowledge that this pricing decision can come from a place of privilege. Some companies can't do it if they need the cash.
One of the companies I worked for signed an annual contract with Sendbird (a messaging service). Now, development time took longer but Sendbird wouldn't extend or cancel the contract. This was a tiny startup paying thousands of dollars for a service they weren't using. We wrote to them a few times but they just stopped responding.
In a world of Sendbirds, be a Slack :)
Thanks for reading!
Khushi