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.