For subscription commerce merchants, payment recovery methods are vital to protecting revenue, and the more such methods, the better.
The PYMNTS Intelligence report “Decision Guide: Adopting Subscription Companies’ Top-Performing Payment Recovery Strategies” drew on a survey of 200 executives in the subscription industry to examine the relationship between failed payments and customer churn and to better understand the best practices of the firms that succeed at managing these challenges.
The results revealed that subscription merchants see an average 22% increase in recovered revenue for every additional payment recovery method they use.
FlexPay CEO Darryl Hicks discussed the importance of addressing failed payments in an interview with PYMNTS posted in December.
“You can get massive, outsized, sometimes even unexpected gains — second order and third order benefits — from focusing on this and really understanding how much this payments problem, what seems like a transactional problem, is actually really significantly tied to the financial performance of your business,” Hicks said.
Payment recovery is not just a matter of revenue. In an interview with PYMNTS’ Karen Webster posted in December 2022, sticky.io CEO Brian Bogosian explained how preventing failed payments can be key to maintaining relationships with customers.
“Failed payments are not only a revenue problem but also a branding problem,” he said. “Customer experience is at the core of brand loyalty. Imagine suddenly getting disconnected from YouTube Live because of a single, accidental failed payment and being unable to watch NBA star Stephen Curry make his famous three-pointer in real time. Customers who want hassle-free subscriptions don’t want to think about payments, especially failed ones that cause disconnection and headaches.”
Subscription merchants must prioritize effective payment recovery methods to protect their revenue and foster long-term customer relationships.
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