When businesses start to grow, they realize the payment recovery process they might have initially been able to manage in-house becomes unwieldy at scale. And if you’re using recurring billing systems that enable businesses to manage billing, invoicing, payments, and dunning on an automatic, recurring basis with ease, a look at the statistics says it all. It becomes obvious that a simple dunning can’t cut it anymore.
A staggering 85% of the total number of customers fail to respond to the run-of-the-mill dunning emails that remind them to update their card details. Continuous follow-up even results to customer complaints.
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. This 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, then you are losing money.
If you can easily acquire new customers, you might think to ask why you should bother focusing on payment recovery? In fact, customer retention is the Achilles’ heel of lots of businesses. Churn – in all its forms – is directly related to revenue and is also a useful metric indicator of how happy your customers are with your company, product, and service.
It’s important to put effort into retaining a high customer retention percentage and satisfying the customers you already have as it’s less costly to keep those number of customers happy. Customer acquisition cost is generally higher than the cost of maintaining them. This means more profit added to your bottom line.
Repeat customers and their repeat purchases are critical to the profitability of subscription businesses. Loyal customers, especially millennials, will use word-of-mouth on social media after having a positive experience with your company.
So, what can you do to improve your customer retention? Gravy’s answer is payment recovery.
Now, dunning software has its place. However, we know that it has to be backed with a full-time focus on payment recovery for it to be effective in creating a negative churn. If you don’t have someone who is focused on the metric of payment recovery, then you are missing out on revenue. You cannot successfully delegate this to someone who has 17 other things to do on your team and expect to get the results that you want.
The secret sauce to recovering failed payments is PERSONALIZED FOLLOW UP. One to one communication. Over 70% of saved payments are a result of a nicer person actually sending a customized email to somebody.
As much as you love automation, it just can’t CARE as a real person can. User experience optimization is vital to profitability.
If you aren’t measuring payment recovery as much as you measure your marketing or sales efforts, you’re losing an enormous amount of money. We have the system figured out, and we’ve created a framework for payment recovery that’s saving on average, 51% of failed revenue within 30 days.
Our specialists will scan your customer data and figure out exactly what needs to be done to retain customers. It might be an email campaign that we recommend or it could be a more personalized follow-up process. Webinars might be necessary to get your messaging through to your customers that are considering not paying next month due to insufficient funds (maybe from coronavirus layoff).
That’s where Gravy comes in. We offer services that help prevent subscriber churn. Our support team experts in recovering failed payments to boost your profits and ltv every end of the month and increasing customer retention. Our proactive retention specialists present a human face to the automation of Dunning software enhancing customer relationships.
We’re pleased to say that our churn-reducing service helps any business model like SaaS, ecommerce, startups, and subscription-based businesses like yours recover payments on a daily basis. If you want to find out how partnering with Gravy can lessen your high churn rate and give your payment recovery efforts the boost it needs, book a free coaching session today. You might also learn a few more things -such as finally figuring out how to calculate churn and customer retention!