Sometimes the subscription revenue you’re missing doesn’t come from new customers at all, it comes from your existing ones through the reprocessing of failed credit card renewal transactions so that they become successful renewal credit card transactions. And a good credit card recovery program can make all the difference.
A credit card recovery program is an automated process in which you’re able to either re-process a credit card at a later time after it has failed, or reach out to customers to ask for updated credit card information.
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For example, if you’re using Recurly, they look at “soft declines” as those that come from insufficient funds, a generic error, or a temporary hold. If this is the case, Recurly will try again at a later time, and they use different strategies depending on what type of soft decline it was. There are limits of course, they won’t try for longer than 60 days past the invoice date, or 20 total transaction attempts. And that’s where their email program comes in handy where you can email your customers asking for them to update their payment information.
As mentioned above, over a period of 12 months, one of our publishing partners recovered nearly $135K in subscription revenue using Recurly. On average, this represents nearly 5% of their total billings before refunds each month.
Another example is a publishing partner who switched from Authorize.net to CDS Global and saw retention rates jump from 48% to 63%, because authorize.net had no recovery program. After the switch to CDS, which has features similar to Recurly’s recovery program, they saw a 27% increase in renewals.
And this initial subscription revenue recovery is only the tip of the iceberg. If you had lost the customer due to a failed renewal, that means you’d lose out on future revenue as well from this subscriber. Being able to do this at every renewal point means that in the future you can generate two to ten times the initial subscription revenue recovered from the first failed transaction. Instead, it converts into a successful transaction and continues the customer relationship.
Technology isn’t the only way to increase renewals though, here are a few more ways to keep people engaged:
- Publish fresh content: Instead of updating only at the frequency of your magazine, drip out regular content that keeps subscribers coming back to the website.
- Email updates: When new content is added, let subscribers know. In the meantime, send digital subscribers Library Previews, which curate a handful of articles related to a single topic, from your archive.
- Engage socially: Share the fresh content on your website, and links to your special collections within your archive to not only increase new subscriptions, but keep subscribers active.
If your business depends on renewable income and auto-billing, and would like to start improving retention and renewal rates, let’s chat.