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How Legendary Companies Make Money

Many companies are excited for and know their top line revenue numbers very well. Legendary companies take themselves to the next level by paying attention to what so many have come to ignore: their existing customers.  See how you can improve failed payments and improving customer retention from our infographic below:
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In the U.S., customer churn costs businesses $136 billion per year — 34% due to involuntary churn and failed payments

 The Cost Of Failed Payments

  • Most business owners know how much revenue is coming in at the top of the funnel, but how many know how much failed payments are costing them?
  • More than 2 in 3 businesses lose 17% or more of subscription profits to churn
  • Payment failure is the #1 cause of involuntary churn
  • Insufficient funds: 53%
  • Credit card limits: 42%
  • Credit card changes: 40%
  • Auto-Renew Increase Risk Of Fail Payment
  • 35% of subscriptions automatically renew
  • Renewals account for 62% of subscription revenue
  • BUT, auto-renew increases the likelihood of failed payments
  • 47% of businesses lose auto-renewals due to changes in payment data
  • Failed Payments Raise Costs
  • 48% of businesses say chargeback rates cut into forecasted revenue
  • 43% say increased customer service contacts from failed payments makes keep customers more costly
It costs 5X more to attract new customers than to keep existing ones

The Forgotten Funnel: Customer Loyalty

  • Improving Customer Retention 
  • Saves on marketing costs
  • Improves service quality
  • Increases profits
  • 65% of a company’s business comes from existing customers
  • Involuntary Churn & Customer Trust
32% of people will stop doing business with a brand or company after just one bad experience
  • Customers may only learn their payment failed when their service stops
  • Payment declines and fees create customer frustration 
  • Poor customer service experiences discourage manual renewal after a failed payment
  • Customer Loyalty Boost Profits
Decreasing churn by 5% could lead to a 25-125% increase in profits
  • 80% of customers are willing to pay more for a better customer experience
  • After a great experience, customers are willing to pay 17% more for services
  • Repeat customers spend 67% more in months 31-36 of working with a business than in months 0-6
  • How To Improve Customer Retention
Satisfied customers are less likely to cancel a subscription and more likely to add services or upgrade their existing package
  • Know who your best customers are
  • Understand why customers leave
  • Learn from customer complaints
  • Offer multichannel customer service
On average, 13% of recurring transactions are declined each month — Just 15% of failed payments are recovered by traditional methods

Pay Attention To Failed Payments

  • The Problem With Dunning
  • Automatic emails lack empathy, demand customers take action, and cannot  resolve customer service
  • 66% of consumers want companies to show they value customer’s time
  • 69% want to shop with retailers that offer consistent customer service
  • Just 15% of customers respond to emails prompting them to update payment information
  • Reduce Card Declines
Reducing card declines can bring payment failure rates as low as 0.5% — That’s a 70% reduction in involuntary churn
  • Direct Debit: Bank-to-bank transactions reduce the number of failed transactions
  • Digital Wallets: More likely to be up-to-date and include backup payment methods
  • Payment Processor: Choose a processor who accepts a wide variety of card brands 
  • Prevent Failed Payments
  • Automated Card Updater: Checks card networks to update payment information behind the scenes — no customer action required
  • Sophisticated Retry Logic: Selects to the optimal time to rerun transactions, based on the type of error that occurred — resolving many payment failures
  • Personalization: Authentic human interaction can recover failed payments while improving customer loyalty
“Lack of direction, not lack of time, is the problem. We all have twenty-four hour days.” ― Zig Ziglar

We have 100% attention on one item. Gravy has its full attention on payments and people. Our mission is to return $1B back to businesses by the end of 2023. Recover your payments today with Gravy.