July 15, 2024

Payment failures: The hidden threat to subscription growth

Daisy Tran

Senior Content Marketing Manager

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Billing & paymentsGrowth & scale

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Failed payments can severely hinder subscription growth, leading to lost revenue, damaged customer relationships, and decreased customer lifetime value. Understanding and addressing these impacts is critical for sustainable business development–keep reading to learn more.

Addressing failed payments is crucial for improving business growth and customer retention, as it minimizes revenue loss and enhances customer satisfaction. Keep reading to learn why payment failures stunt business growth, based on findings from a Forrester Consulting study commissioned by Recurly. Discover the hard consequences, such as decreased customer lifetime value, lost revenue, and increased operational costs, along with soft consequences like damaged subscriber relationships, challenging acquisition, and harmed brand perception. Key challenges include lack of flexibility (69%), friction with multi-gateway orchestration (63%), inadequate churn management capabilities (56%), lack of scalability (55%), limited analytics/reporting capabilities (52%), inadequate subscription management tools (48%), limited use of AI/machine learning for churn reduction (40%), and lack of automation in billing/invoicing (39%). The domino effect of failed payments triggers lost sales, decreased LTV, increased costs, damaged relationships, and reduced customer confidence. Strategic solutions include advanced billing and payment technology, flexible and scalable platforms, payment orchestration tools, robust analytics and reporting, AI and machine learning applications, and automated billing/invoicing processes. Benefits of reducing failed payments include improved subscriber retention, increased LTV, enhanced customer experience & loyalty, and greater revenue growth. Learn more in our commissioned study by Forrester.

TOPICS

Billing & paymentsGrowth & scale

RELATED POSTS

Staying on top of subscription tax updates within Recurly100% of businesses feel the impact of failed payments, survey finds
subscribesubscribe
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