Do you use a collection service?
We all know what it’s like to have payment failures. Whether they be intentional or not, payment failures are frustrating and can cost your business hundreds of thousands of dollars. If you operate a recurring revenue model or a subscription based business model, then payment failures are a way of life for you and your business. And when you realize you have a serious payment failure problem you may tempted to go to a collection agency. Here are 3 things collection agencies do that will absolutely kill your business.
#1- Fear Tactics
This is a tried and true technique for just about every collection agency out there. They call your customer threaten legal action, and put as much fear into your customer as possible. What makes this worse is that it works. Collection agencies have great success intimidating customers into paying their bill. But this approach will all but guarantee that you will never sell to this customer again. Long-term loyalty? You can kiss it goodbye. You may win the battle with this approach but you will ultimately lose the war. It’s just not worth it.
#2- They Wait Too Long
Most collection agencies wait 30-60-90 days before they begin contacting your customer. Think about this from your customers point of view. They haven’t thought about their failed payment for months, and then out of the blue they get a call from a pushy collections agent. The agent intimidates them, assumes the worst, and gives your customer a black eye. All because your customer may have just had an expired credit card! Timeliness makes all the difference. The quicker you can respond to your customers with failed payments the more likely you are to get them back online and keep them online for longer.
#3- They Don’t Care About Your Brand
The last thing a collections agency is concerned with is your brand. They simply don’t care about your standard of customer service. They get paid according to how many payments they can recover, so that is the only metric they are focused on. If you think they are worried about the consistency of your message, or empathy to your customer. You may be in for a rude awakening.
A Better Approach
At Gravy we don’t do collections. We don’t use fear tactics. We don’t sacrifice your customer lifetime value for a small recovered payment. We help you to develop a sustainable strategy using proven tactics and systems to help you deal with the issue of failed payments once and for all. We are 100% U.S. based and we have discovered the keys to closing the back-door of any business. You can recover those failed payments, and you can do it in a way that doesn’t sacrifice your brand, your standard of customer service, or your customer’s dignity. Book a call today to get started.
Do you have subscription revenue?
Subscription revenue is a wonderful thing. When done right, subscription revenue can give you a very predictable, and steady flow of cash into your business. This business model is quickly becoming one of the most prefered models in the U.S. with subscription-based revenue for all companies nationwide reaching more than $300 billion! Check out all of the stats HERE.
It’s also a model that investors and private equity firms love to see. If you aspire to sell your company one day, then this is a great model to implement. But its not without its disadvantages. And the most sinister of these disadvantages is without doubt, credit card declines. You are never more at risk than when you encounter these 3 most common times for failed payment in your subscription-based business. Consider it a fair warning:
Risk #1: Free Trial Ends
Tell me if you have ever experienced this before. A customer signs up for your 10-day free trial, and when their trial ends after the 10th day, what happens? Their payment fails. You did the hard work of getting them in the door, but as quickly as they walked into your business they are now walking out. Do you know why they left? Do you know why their payment failed? Do you know how many times this happens each month? Most business owners don’t, so don’t feel bad. But if you want to sure up the back end of your business you need to dig into the numbers and start finding the answers to these questions.
Risk #2: The Witching Hour
If you sell annual subscriptions then you may have noticed that you are most likely to lose a customer in month 5 or 6 of your subscription cycle. The reason? This is the time when the initial excitement and desire for your product or service has waned, but there is still a significant amount of time, and therefore money, that the customer has committed to their subscription. The result is usually a decline in payment.
Risk #3: Renewal Time
This can be for subscriptions of any length. Regardless of the time frame, when it comes time to renew a subscription you are guaranteed to see failed payments and credit card declines. This is not a knock on your product or your service, it’s just that customers require consistent engagement to understand the long-term value of your product.
What To Do:
Here’s what you can do to address these times of risk. One best practice for all of these scenarios is to simply anticipate. If you know that this is going to happen you can get ahead of the payment failures before they happen. Make a plan and have someone on your team dedicated to following-up with these customers. A timely and personal response can yield amazing results.
Just keep in mind that it is not enough to ‘have a plan.’ You need to have an ‘effective plan!’ So if you are not measuring the effectiveness of your payment recovery efforts than its all a waste. Be sure to have someone on your staff dedicated to the metric of payment recovery. They should be reporting these numbers to you every month. It is so important to have visibility of these credit card declines so you know exactly how much money this is costing your business.
We Can Help You
If this sounds like more time and effort than you are willing to dedicate to this problem. We get it. You have a million things to do, and your team does as well. But you should know that the only way to really solve this problem is to have a full-time focus on the issue. That is, a full-time employee dedicated to the one metric of payment recovery. It’s an expensive solution to be sure, but this is by far the most effective approach.
We realize that most small businesses just simply can’t afford a full-time employee to address this issue. This is why we started Gravy. Our company can implement our proven systems to your payment failure problem, give you immediate follow-up for your credit card declines, and give you all the advantages of a full-time employee for a fraction of the cost. In fact, we don’t get paid unless we are adding money to your bottom line!
We’d love to connect with you. Click the link below to schedule a call and see how we can help your business.
One of the most overlooked aspects of any business is back-end payment failure. This is especially true for subscription based businesses, or any business that sells payment plans or operates a recurring revenue model. There is money walking out the back door of your business and you can find out exactly how much by looking at your monthly failed payment number. But the truth is, most business owners don’t know how much money they are losing, or they don’t spend enough time trying to solve the problem of failed payments and credit card declines. Why? Well, the misconception is that there is not big money to be found on the back end of the business to warrant the time, effort, energy. But if you really dig into the numbers I think you may be surprised.
The standard credit card & debit card failure rate across all industries is 10%. Which means, there is a very good chance that 10% of your top-end revenue is being lost to payment failures and credit card declines. What is 10% of your yearly top-end revenue? My guess is that this number is a bigger number than you want it to be. And if you have not put together a plan to address your credit card declines you can check out this blog post to find out what you can do right now to start recovering these failed payments.
One step you can take immediately is setting up an email sequence. If you have a CRM that allows you to set up an automated email sequence, all the better. But if not, you can find dunning software that will help you set up the automation you need. Recurly, Stunning, & Churn Busters are all great products to help you set up your dunning automation. These products will allow your business to respond to payment failures almost immediately with an email sequence, which is great place to start!
But before you get too excited there’s something you should know. 85% of dunning emails go unread. The reason? Well there are a few, but the main reason is because most of these emails are thrown together in a hurry, and are very obviously automated. How often do you respond to an email that has clearly been sent to you through automation? Not very often right? I know those emails are at the bottom of my priority list. So it is with your customers. The solution is to intentionally craft these emails in a way that makes them personal to your customer. Here are 3 ways to write better dunning emails:
Writing Better Dunning Emails Tip #1: Include Your Customers First Name In The Subject Line
Nothing is more personal than someone’s name. For your customer to scroll through their inbox and see their name written in the subject line of an email, will all but guarantee that the email will stand out. Especially when they see the email is from a business they recognize and trust.
Writing Better Dunning Emails Tip #2: Use Emojis
Another way to grab the attention of your customer is to use emojis. I know this may sound a little unorthodox at first, but emojis allow your email to stand out using what is called ‘optical disruption.’ Emojis break up the predictable pattern of text and breaks away from the whitenoise of an email inbox.
Writing Better Dunning Emails Tip #3: Use ‘Final Notice’
Everyone works better with deadlines right? I know I do. Tell me I have a year to complete a project and I’ll start working on it in December. There is nothing more motivating than a quickly approaching deadline. You can leverage this truth in your dunning emails as well. Establish a deadline for your customer and you will see better click through rates and response times.
If all of this sounds like more effort than you are willing to dedicate to this problem, then you should know that you are in good company. Most business owners don’t want to dedicate the time or effort required to adequately solve the problem of payment failure. And I don’t blame you. You should be spending your time focusing on the big picture and growing your business. This is exactly why we started a company called Gravy. We have years of experience recovering failed payments. And over the years we have developed proven systems and strategies that really work. We can do this for you, and at a fraction of the cost that it would take to hire a full-time employee to address the problem for your business. You can close the back door of your business today and start recovering 50-70% of your payment failures each month. We’d love to talk with you to see how we could help your business. Click the link below to book a free discovery call.
Did you know that for years the decline rate on credit cards and debit cards has remained virtually unchanged? There is rarely any variation, and if there is, it is usually within a 3% window. The current stats show that credit cards are going to decline around 7.5% of the time, while debit card will decline right at 13% of the time. If you average these together you get a very consistent decline rate of around 10%.
The truth is that most credit card and debit card transactions are successful. 90% of the time the payment goes through, and that’s good news for all us. But what about the other 10%? Here’s what we know. As long as your looking at credit card declines as a percentage number it’s not so bad. But when you attach a dollar sign to that number, all of a sudden it becomes a much bigger deal.
If you own a SaaS business, or an information business, or any subscription based business that receives most or all of its payments from credit cards, then you can rest assured that you are more than likely experiencing a 10% decline rate on all credit card payments. It has nothing to do with you, your product, your service, or your company. A 10% decline rate on credit cards is simply a universal rule. We all experience this and it happens for a variety of reasons. Expired cards, insufficient funds, stolen cards, lost cards, the list goes on. So here’s my question: How much money is that costing you and your business? If you’re not sure, you need to be. My guess is that you probably already know, and seeing that amount of revenue walk out the back door of your business is not something you enjoy seeing. The great news is that there are steps you can take to recover this lost revenue.
The first step is purchasing some kind of dunning software.
There are lots of great options out there. Recurly, Stunning, Churn Buster are just a few of the options that you could choose. These software programs will help you create an automated email sequence that will touch base with your customer as soon as their credit card payment fails. These programs are great for helping you see how much is failing each month and actually repairing some of the most basic transaction failures. All told, you can expect to recover about 15% of your failed revenue with these programs. This is a great first step, but it should only be a first step. What do you do about the other 85% of your lost revenue that is walking out the back door?
Your next step should be human touch.
Software is great, but it’s no substitute for human touch. Your customers will respond much better if they know they are actually talking to a person. Additionally, a person can actually help to solve the problem of their payment failure if there is a legitimate reason for the failed payment. Software just can not do that. 85% of dunning emails go unread. But the click through rate on emails that have been personalized and optimized by an actual person are much higher!
We have cracked the code.
At Gravy we start where software stops. Recovering 12-15% of your credit card declines through software is a great first step, but we consistently average over a 50% recovery rate for our customers with several seeing recovery rates as high as 70-80%! We’ve cracked this code. We know how to do this. Our team is 100% human powered, and we are 100% based in the U.S. We treat your customers with dignity, and the same amount of care that is consistent with your brand. We know that fear tactics and trying to scare people is not the way to recover failed payments. Collection agencies have been doing this for years and it simply does not work. But having a team of people dedicated to recovering your credit card declines with prompt and respectful interaction with your customers is a winning formula, guaranteed!
Delegate your credit card declines with caution.
As a business owner or CEO you are focused on the big picture of your business. That is why it can be a little unsettling when you realize that you have a credit card decline problem. Maybe you own a SaaS company or an information company like we did in 2015. If so, then you may have a sizable percentage of your annual revenue wrapped up in subscription payments, which fail at a rate of 10-12% every month! This was a big problem at our last company, and we did virtually nothing about it until that number quickly became a 6-figure number! All of a sudden we realized we had do something to get this revenue back into the business.
We handled this problem in 3 stages which played out over many months of trial and error. Here are the 3 things we did to delegate the issue of credit card declines:
Stage 1 of Delegating Credit Card Declines: Automated Emails
This first thing we did was to delegate this problem to software. We set up an automated email sequence inside using our dunning software and waiting for the money to come pouring back in. The problem was, not much money was coming back. Don’t get me wrong we recovered some of the lost payments but what we didn’t know was that dunning software only averages a 12-15% recovery rate. That wasn’t good enough for us, so we moved to stage 2.
Stage 2 of Delegating Credit Card Declines: Drive-By Delegation
The second thing we did was to hand this off to someone on our team without much vision or direction. We found someone in our payment department and we dropped this problem on their desk, asked them to handle it and walked out of the room. It was a prime example of drive-by delegation which is never an effective way to solve a problem. This task was just number 17 on their to-do list and it just wasn’t a top priority for them. With someone looking into this occasionally we were able to recover around 30% of this lost revenue, but we were still losing 70%!
Stage 3 of Delegating Credit Card Declines: Create A Team
The third thing we did was to create an entire team to do nothing but address the problem of credit card declines. We hired people for this specific task and we built a team. The results were remarkable. We started to recover 80% of our credit card declines. What we learned was that this problem is only really solved when you can allocate a full team of people with a full time focus on solving the problem of credit card declines.
The only problem with hiring a team to solve this problem was that it was expensive. We were paying full time salaries to solve a static problem. There was no opportunity for those employees to generate more income for our company outside of the payments that were failing. At best they were going to recover 80% of a 6-figure number. It was worth the investment, but just barely.
There Is A Better Way
We started a company called Gravy to solve this specific problem for businesses. We want to make solving the problem of credit card declines to be a no-brainer for business owners and CEO’s. We want to give you all the advantages of having a full-time team dedicated to solving this problem without the expense associated with full-time employees. We want to help you dominate this problem with a full time focus that implements all the advantages of automation and human touch. We want you to know that someone is thinking about your credit card declines night and day, and the best part is, you only pay us if we make you money. So the money coming back to you is all Gravy!
Book a call to see how we can help you solve your credit card declines.
If you have been in business for any amount of time then you know that there are two ends to every business. The front end, which is sales and marketing. And the back end, which is customer service and customer retention.
Every business focuses on the front end, and you should! You wouldn’t have a business if you didn’t do sales and marketing. It is absolutely key to sustaining business growth and growing revenue. But did you know that there is usually a big opportunity to increase your revenue on the back end of your business as well. Here’s how to do it:
Tell me if this sounds familiar. You have spent money to acquire your customers. You have run ads, you have done marketing, you have got them on sales call, you have made your first sale to them. Their first payment to you goes through, only to fail in month 2 and month 3 and month 4. You see the declined payments but you simply don’t have the time to track down each of these customers one by one every time this happens. We get it. Believe me, we’ve been there. So what do you do?
Automation Trumps Determination
It all starts with automation. You have to have a sequence set up to contact these customers as soon as their payment fails. I think we can all agree that automation can make this a lot easier on you and your team. There are lots of good dunning software programs that will help you do this. (Recurly, Stunning, Churn Busters) But most businesses get software like this to set up their automated sequence and then forget it. Problem solved right? Here’s what you need to know.
If you really want to close the back door of your business and recover this revenue that is walking out the door, then you need to have metrics to measure the effectiveness of your payment failure follow-up. How often do customers actually open the automated emails? How often do they actually convert? How much revenue are you actually saving? These metrics are absolutely key!
Of course if this was the front end of your business most everyone would know the important stats. Every marketer, and CEO knows that you need to measure who is opening your emails, how many click-throughs are happening, and what is the conversion rate. But if you don’t know what these statistics are, or how well this going on the back end of your business with payment failure, you are losing TONS of money!
The One Simple Strategy To Add Revenue Without More Customers: Visibility!
So here is the one strategy that will help you add revenue without adding any customers. GET VISIBILITY of your payment failure statistics. Know your numbers. There are four primary numbers that you need to be measuring.
This is essentially a reverse sales opportunity. And it is a great way to add to your bottom line.
Here’s The Problem
This sounds great. For a lot of you, your failed payment revenue is a 6-figure number! And while you see the opportunity to add revenue to your business, you probably will not do this. Why? Because you have bigger fish to fry. You have sales to be made, you have strategy to work on, you have to lead your team and your business day in and day out. We get that. And this why we started a company called Gravy.
We can do this for you. We will come along side your business, do an audit of your automated sequence, optimize your follow-up for maximum effectiveness, and then implement our manual follow-up process to work alongside your automation to give you a full-time focus on your payment recovery. When a credit card fails you will have a full time person, and a system of automation 100% focused on getting your customer back online and your payment back in before it becomes a real issue.
So take a look at your automated follow-up procedures and get visibility on your payment failure numbers. And while your in the process of doing that, if you would like to talk about how we can help. Click the link below.
Dunning software can help your business recover failed credit card payments.
If you have been operating a subscription based revenue business for any length of time then you know that credit card declines, and failed payments are a way of life. Regardless of the product you sell or the service you offer, you can expect a 10-12% rate of failure for all of your payment transaction.
Credit cards fail for any number of reasons. Insufficient funds, fraud, invalid card number, expired card, lost card, temporary holds, you get the idea. There are a hundred ways for a transaction to go wrong. The best dunning software will help you to repair these basic transaction failures. But it is important to know exactly what you are going to get when you subscribe to one of these services. There’s some good in what they offer, for sure. But there’s also some bad. Here’s the breakdown:
The Good: Automated Emails
Recurly, Chargebee, Chargify, Zoho, Churn Buster, and every other dunning software available to you will primarily use and automated email sequence to notify your customer of a failed transaction. This is a great start for your company if you are currently doing nothing to address the problem of credit card declines and failed payments. Each of these software platforms will help you build out your email sequence using the language that best fits the culture of your business and will send these email immediately after a payment has failed.
The Bad: Spam
Unfortunately a lot of times these emails will go to your customers spam folder instead of their inbox. And the stats on using an automated email sequence as your primary defense to failed payment is not encouraging. On average, 85% of automate dunning emails go unread...85%!! Not exactly the ROI all of us were hoping for.
The Good: Visibility
The often under-appreciated value that these software programs can bring your company is simply visibility. What are your monthly failed revenue numbers? If someone walked into your office right now and asked you that question, could you answer them? Maybe you can, but most business owners can not. Most of the dunning software available to you will have the ability to report to you the number of declines, renewals, and recovered revenue each month. This is the first step to addressing your failed payment problem, simply knowing the numbers.
The Bad: Limited Recovery
The unfortunate reality is that the best software you can buy for your dunning needs is only going to recover around 10-12% of your failed payments and lost revenue. There’s only so much that an automated email sequence can do. If there is anything more complex than an expired card or incorrect card number, the software will be hard-pressed to solve the problem. The bottom line is that software simply can’t react to every possibility.
Another Option Available To You
If all this doesn’t sound good enough for your business as it pertains to recovering this lost revenue, rest assured you are in good company. Most business owners & CEO’s feel exactly the same way. Recovering only 10-12% means walking away from nearly 90% of your lost revenue. That is simply not good enough. You do have another option besides software alone, and it’s what our company does day in and day out.
We exist as a company to help you solve the problem of failed recurring revenue in your subscription based business. We have been implementing proven strategies and tools for years and have come to expect an average of 50-70% recovery rate for your credit card declines and lost payments. The secret? People. We are a people driven business. We don’t rely on software alone to recover failed revenue. We utilize human touch to care for you customers in ways that software simply can’t. It’s more expensive for us to run our company this way, but it is far more effective for you and your failed payments. The bottom line is simply this, software can’t care.
Follow-up failure usually looks like this.
You have a marketing department. You strategize, you gameplan, and you work like crazy to get a customer engaged with your company. You spend money, you analyze, you know your customer acquisition costs and every other metric associated with getting a customer in the door. The front end of your business is a well-oiled machine, and because of that, you end up with a customer who purchases your product or your service. Mission accomplished right? Until that customer’s credit card declines after just one month of subscription. You know someone needs to dig into that payment failure and figure out why, but you just don’t have the time. So you go back to doing what you do best, growing your company. You may be losing some customers out the back door, and you may be leaving some revenue on the table but hey-- that’s the cost of doing business, right? It doesn’t have to be.
The Price of Follow-Up Failure is More Than You Think
The reality is that follow-up failure is expensive. You can easily look at your failed revenue numbers and see the initial cost of your credit card declines and failed payments. But you also need to look beyond the numbers and know the total cost of your follow-up failure. Here are 3 ways that follow-up failure slowly sabotages your business.
#1- Customer Lifetime Value Declines
You paid to get your customers in the door, and you need to keep that customer in order to get a return on your investment. I don’t know how long that is, but you do. It may be 3 months, may be 4, it may be longer, but the bottom line is this: when their credit card fails you not only lose the payment that you were initially charging for, you lose all the payment that were coming in the following months as well! This is what the Customer Lifetime Value metric measures, and this what follow-up failure destroys over time.
#2- Payment Failure Accumulation
This is most evident in growing businesses. If you are adding new customers each month and you are experiencing failed payments, this can get out of hand in a hurry. Failed payments don’t feel worrisome initially. At first it’s only one here and there. But as your business grows these failed payments start to stack. It wasn’t a big deal when you lost four customers in month 7, but when you lose ten more in month 8, and fifteen in month 9 you start to feel a sense of urgency. You may not have experienced this yet if you are just getting started in the subscription based business, but I promise you will. And if this goes unaddressed, your follow-up failure will prop the back door of your business wide open with thousands of dollars of lost revenue walking through the door.
#3- Loss of Customer Engagement
The is arguably the most devastating affect of follow-up failure; losing customer engagement. You know the stats. You know that it is much easier to sell to an existing customer than it is to acquire a new one. You’re going to offer other products, you’re going to have more services, you’re going to want your existing customers engaged and locked in to what you are doing. But follow-up failure absolutely destroys customer engagement and destroys any hope of a future sale to your existing customer base.
Looking Beyond the Numbers
This why looking beyond your payment failure numbers is so important. If you are not measuring your Customer Lifetime Value, your monthly Payment Failure, or you Customer Churn, you need to start today. Check out this article to understand more about the metrics you should be analyzing.
To Keep Your Customers Checked in, You Can’t Check Out!
Our company, Gravy, can do this for you! We live in this world day in and day out. We calculate these metrics in our sleep, and we have years of experience testing and proving strategies that work to recover your failed payments, increase your customer lifetime value, reduce your customer churn, and increase your customer engagement! We can give you a full-time focus on your failed payment and eliminate your follow-up failure altogether. We’d love to talk to you about how we can help you close the back door of your business, recover your lost revenue, and start adding money to your bottom line. We work primarily off commission, so you don’t pay unless we are making you money. So what do you call a service that makes you money without you having to do any extra work? You can call it what you like, we call it Gravy!
The Story of Pat Flynn
Pat recently sat down with Forbes to discuss his story. You can check it out here. It’s an incredible journey that began in 2008 when Pat created a website called smartpassiveincome.com to teach people how to create and run their own online business. It was a decision born out of necessity more than anything else. Pat was laid off from an architectural firm during the recession of 2008. And with no prospect of a future job in an industry that was hit really hard by the downturn, Pat needed an alternative source of income. The answer? A website he had created to help other architectural employees pass an exam known in the industry as the LEED exam. What he soon realized was that this little website was receiving 1000’s of visitors a day. So Pat packaged the content he was posting on his website into an easy to read study guide and began selling it online. “That first month, I made $7,008.55. That was just life-changing for me.” Pat recalls. By the end of the year he was generating more than $12,000 a month in revenue! “I was so excited, I wanted to share how it all happened and what I had learned, so I created smartpassiveincome.com that same month.” Pat started his blog to teach people how they could make money online just like he was. And before long Pat’s following turned into a robust community of enthusiastic entrepreneurs. As I write this blog post (November 2017) Pat is generating more than $140,000 a month in revenue selling all types of courses and guides. The growth of his company has been remarkable, but all that revenue came with a very unique problem.
The Problem of Failed Payments
Before Pat ever started his business he knew he would need to have a plan for failed payments and payment recovery. It’s a plan that most entrepreneurs and business leaders often overlook. Not because they are careless, but simply because solving the problem for failed payments and payment recovery is not sexy. Entrepreneurs and business leaders are forward thinking, on the move, and usually looking to take new ground. While payment recovery is back of the business follow up, which is hardly inspiring. But savvy business leaders know that the issue of payment recovery will rear its ugly head at some point. Which is exactly what Pat Flynn anticipated before the issue became a serious one.
So what exactly is payment recovery, and why does it matter? I’m glad you asked. 12% of recurring monthly credit card transactions fail each month. Which is a huge open door at the back of any subscription-based business. Businesses like these literally leak large amounts of money each month if this problem goes unaddressed. And while 12% may not seem like a big number, in terms of actual dollars, it can become a 6-digit number in a hurry. This is not something that most business owner foresee, but Pat Flynn saw it coming.
The Solution to Failed Payments
The solution for recovering these failed payments is not an easy one. Especially for growing businesses like Pat’s. With the problem compounding Pat had a couple of options at his disposal. One solution would be to hire a full-time employee who would focus on the single metric of failed payment recovery. This is an expensive solution because it means hiring a full-time employee and all the costs that come along with them. And while having someone whose sole job and responsibility is to monitor and execute failure follow-up is probably the most effective solution, it is by far the most expensive. Another option? Software. There are several software providers that will help you repair basic transaction failures. (Expired Credit Cards, etc.) But in terms of recovering actual revenue for your business that is adding to your bottom line, you can expect a recovery rate of about 9-12%. And while this solution is certainly cheaper than a full-time hire, the recovery rate is low. So which one did Pat choose? Neither.
Pat opted for a third option. He found Gravy. Gravy is a company dedicated to fixing the problem of payment failures for small business all over the world. Gravy combines the low-cost solution of software with the high recovery rates you would get from a full-time hire. It’s like having a full-time employee, recovering up to 80% of your failed payments, for a tiny fraction of the cost!
Pat Flynn continues to inspire and open doors for entrepreneurs and small business owners all over the country. It’s his life’s passion to help these business owners. And with yearly revenue now surpassing $2 million, Gravy is helping Pat stay on top of a very tedious task, allowing Pat to do what he does best, help entrepreneurs! We’re happy to be a small part of Pat is doing, and we’d love to be a part of what you’re doing as well!
Subscription Revenue models have been increasing dramatically over the last 3 years. The data says that subscription-based revenue makes up a $300 billion market! Truth is, everybody wants a subscription based business model. And why not?! It is the ultimate win-win for the company and the customer. The customer gets what they want with ease and convenience and the company gets stable and predictable revenue. Why wouldn’t you opt for this type of model?
Check out these stats!
The Dirty Little Secret of Subscription Revenue Models
So what do you have to lose? We should all be jumping in the water right? Maybe. But before you do there’s something you should know. And if your business is already operating this model then you are already well aware! Subscription based models have a big problem. That is, credit card payments fail, and they fail at an alarming rate. Did you know, that of the $300 billion market of recurring revenue that 10% of that number fails each year to credit card declines? That’s $30 billion dollars each year that could be going to companies like yours, but don’t!
Small Business Payment Failure Rate
And it’s not just large companies. This failure rate is true of small businesses as well. Credit card declines remain consistent across the board at 10-12%. This is a universal truth. If you are operating a subscription revenue model or are thinking about going to one, you need to have a plan for credit card failures.
3 Things You Can Do To Address Your Failed Payment Problem
We talk to business owners all the time about this specific issue. It’s a problem for just about every business owner we talk to. And with hundreds of conversations under our belt, we have identified the top 3 approaches that most business owners and CEO’s implement to handle the money pit that is created with subscription based revenue.
Approach #1: Do Nothing
The Best of Both Worlds
Our company Gravy exists to help you and your business recover failed payments in a way that maintains your brand, upholds your standards of customer service, and adds money to your bottom line. Gravy gives you the best of both worlds, a full-time focus without a full-time price. We do failed payment recovery in a way that is honoring to your customer and with the diligence and consistency needed to be truly effective. We take all the work off of you and put money back into your company. The money is gravy! You don’t have to do anything to add more revenue to your bottom line. Simply let us go to work on your subscription revenue failure!