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!