Lurking in the shadows is a creature consuming your recurring membership revenue and costing you return guests.
Its name? INVOLUNTARY CHURN.
But how does it happen? And can it be stopped? If you feel like your memberships are slipping through your fingers, keep reading as we answer all these questions and more by taking a closer look at recurring memberships and how involuntary churn happens.
What is involuntary churn?
Let’s be real, churn isn’t as scary as it seems once you understand it. So let’s break it down.
Churn is the number of subscribers or customers moving out of a collective group over a specific period.
Involuntary Churn, in this instance, happens when a customer is unintentionally lost due to an unavoidable reason concerning their card payment. It’s called involuntary because your guests aren’t aware it’s happening.
How does involuntary churn occur?
Involuntary churn can happen in a number of ways, including:
- Insufficient funds on the card
- Expired or outdated payment information
- Lost or stolen cards
Think about it, when your card expires, do you instinctively contact EVERY place you use it to update these details? No, we didn’t think so.
Venues lose as much as 10% of their recurring membership base per month from failed payments alone, which is why our team is constantly developing our payment technology to get this rate as low as possible.
How can I manage involuntary churn?
Fortunately, using the right tools, involuntary churn can be handled with ease.
Our ROLLER Payments platform is specifically designed to identify cases of involuntary churn and stop them in their tracks. Here are all the ways we help reduce involuntary churn:
1. Dunning payments
Simply put, dunning is when a business systematically communicates with its customers to recover revenue that is due.
This can come in the form of:
- Hand-delivered or electronic reminders
- Phone calls
- Manually retrying to retrieve the funds
At ROLLER, we have recently made some dunning enhancements to give venues the best chance of managing involuntary churn.
We have researched over 12 months of recurring payment data to identify patterns to optimize the collection of recurring revenue. When the first recurring payment collection fails, the process will now retry the payment four times, including frequent payroll and credit card settlement dates.
Additionally, we will suspend the membership earlier than the previous process whilst still attempting to collect payment in the background. If the guest visits the venue after the 2nd collection attempt has failed and their membership is suspended, staff can collect payment immediately to end the dunning process and restore the recurring payment membership to an active state. Overall, recent dunning enhancements have been shown to reduce involuntary churn rates by more than 6%.
ROLLER’s new smart dunning feature uses Adyen’s global network and advanced machine learning technology to automatically recover even more failed payments. On average, those who have activated it have seen a saving of ~$500/month in lost revenue per venue.
And the best part? The small fee is only charged when a payment is recovered, so the feature basically pays for itself.
It’s also worth remembering that given that churn is involuntary, the amount of revenue recovered will be greater than just that specific payment. This is because that member is no longer lost and therefore will continue to make future payments. With this in mind, reducing your involuntary churn rates by even a small percentage can net thousands of extra $$$s revenue per month.
ROLLER Payments operates through a single payment platform, Adyen, to offer unified eCommerce payments. Adyen offers a variety of payment options, greater security, and in-depth reporting to simplify payment processing. Adyen manages some pretty big names, including Facebook, Uber, Netflix, Pinterest, and Spotify - just to name a few!
One feature of ROLLER Payments, Auto Rescue, directly aims at addressing the #1 reason why online card payments fail, which results in lost revenue and involuntary churn: insufficient fund declines.
While basic retry methods result in recovering 20% of lost funds, by adding smart retry logic to the mix, up to 30% more can be retrieved. ROLLER Payments uses machine learning algorithms to schedule a more timely recovery attempt.
ROLLER Payments’ smart logic factors in a wide range of variables to better time retrieval of lost revenue. These include:
By operating our ROLLER Payments solution through Adyen, together we have retrieved more lost revenue for customers in fewer attempts, resulting in reduced involuntary churn. Pretty neat, huh?
3. Account Updater
Another key feature used to help fight involuntary churn is Account Updater. This innovation automatically updates information on cards bringing a better customer experience for shoppers so they don’t have to update their cards manually.
For example, when a guest’s card expires, is lost or stolen, and then replaced by a new card, ROLLER Payments is often able to automatically update the guest’s payment token to continue charging the new card. This has the dual benefits of fighting involuntary churn and reducing pain points for guests needing to update their card information manually.
And with so many different ways to ensure your hard-earned $$$s don’t go astray, what’s stopping you from giving it a go? With ROLLER, you will also be able to move your existing recurring memberships from your existing payment provider onto ROLLER Payments with ease to take full advantage of all the advanced technology we've developed.
To learn more about accessing ROLLER Payments or how you can fight the involuntary churn monster, contact our team today.