A Billing Failure happens on 10-12% of all credit card transactions.
This is how it usually goes down. You sell a monthly subscription, you get a payment online, and then somewhere between month 4 & 5 that payment fails. We talk to business owners all the time, and we hear this story over and over. Most CEO’s chalk this up to the cost of doing business, they throw some dunning software at the problem and consider it ‘solved.’
Here’s the problem with that approach. Dunning software will only recover about 15% of the total number of billing failures. Dunning software is a great first step, but it shouldn’t be thought of as a comprehensive fix for your billing failures. It can be part of the plan, but it shouldn’t be the whole plan. Here are a few software platforms that address billing failures. Recurly, Churn Buster, Stunning
Most dunning software platforms initiate an automated email sequence as the primary method of getting a payment back on-line. But did you know that 85% of dunning software emails go unread? The reason why is because they are automated, and your customers know when they are receiving an automated email from you. The reality is that people just don’t respond well to automated emails. There is very little sense of urgency when there is not an actual person on the other end of the email.
Here are two reasons why dunning software should not be the only bullet you shoot at your billing failures:
Your dunning software can not work with a customer on alternate payment methods, or different payment structures to make the subscription more manageable for your customer. Your dunning software can not express empathy when the customer has a legitimate reason for their billing failure. Entrusting this aspect of your customer service to software alone is a risky proposition. There is just something to be said for human touch when it comes to this type of customer service. Check out this blog post on why human touch matters to your customer.
When you implement dunning software, it either works or it doesn't. The software will send anything you want it to send, but if your recovery rates are low, the software is not going to try other solutions or tactics. It can only do what you instruct it to do. Which means you have to have a person who is managing the software and tweaking the software to maximize its impact.
Here’s the bottom line. Your billing failure is always worse than you think it is. And if you don’t have a full-time focus on this, that is, a full-time person dedicated to relentlessly pursue any and all failed payments, than you are losing money.
Gravy can help you do this. We can give you all the benefits of software, with the effectiveness of a full-time employee dedicated to recovering every single one of your billing failures. Sounds expensive right? Well here’s the best part, we work on commission.
So we only make money unless you are making money. If we are not adding money to your bottom-line then you don’t pay us a commission.
It’s a no-brainer. And when your business sees an influx of revenue that was previously walking out the back door...we call that Gravy money. You can book a free discovery call with us today to see how much money we can add to your bottom line by clicking the link below.