Revenue Acceleration for Subscription Businesses
The Most Effective Way for Companies with Recurring Revenue to Increase Growth
SOLVING THE LARGEST SOURCE OF CUSTOMER CHURN IS THE FASTEST, MOST EFFECTIVE WAY FOR SUBSCRIPTION COMPANIES TO ACCELERATE GROWTH
Here is the equation that subscription businesses should use to measure the full value of a recovered customer following a failed payment.
These benefits can be realized without spending any additional money on customer acquisition, which is typically the largest expense for subscription businesses. In fact, almost no other investment will accelerate subscription revenue growth more than a high-performing failed payment recovery solution.
Let’s use an example of a subscription business with the following metrics:
- 50,000 active customer accounts
- $50 average customer monthly billing
- 15% monthly growth rate
- 13% failed payment rate
- An in-house customer service program recovers 20% of the failed payments
- The average customer lifecycle is 8 months
We can calculate the acceleration of overall company growth rate when a best-in-class failed payment recovery solution, such as FlexPay’s AI-Powered Invisible Recovery™, is deployed.
|12-month cumulative Revenue Forecast||$39.9M||$47.5M|
|Active Customer counts after 12 months||80,631||108,405|
This example shows that Invisible Recovery™ will increase this company’s annual revenue by 19% and increase their active customer count in 12 months by 34%. As you can see, revenue growth quickly accelerates when the number of active customers increases through failed payment recovery.
CONCLUSION: Calculating the total economic value of customers recovered from failed payments transforms failed payment recovery from a one-time transaction to the recovery of a customer who generates months of additional billing for the duration of their natural lifecycle. When you recognize this impact, it is clear that subscription businesses must make failed payment recovery a priority using a solution that optimizes failed payment recovery rates with methods that maximize the length of the customer lifecycle after recovery.
The FlexPay Invisible Recovery™ platform is an AI-powered solution that optimizes customer recovery from failed payments and delivers proven long-term customer retention following recovery.
Invisible Recovery™ produces the highest rate of customer recovery by creating an individual strategy for each failed payment, resulting in optimal customer and revenue recovery.
Invisible Recovery™ works quickly while completely avoiding customer visibility to the failed payment, which eliminates the customer churn created when subscription customers are made aware of the payment issue.
FLEXPAY RESEARCH SHOWS INVISIBLE RECOVERY™ DELIVERS THE HIGHEST RECOVERY, AND SUSTAINED RETENTION:
- Up to 70% improvement in failed payment recovery rates compared to other recovery solutions
- Up to 45% longer customer retention following recovery compared to other failed payment recovery solutions