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Churn is an unavoidable part of any business, and it’s proven especially prominent in SaaS endeavors. Just because churn is something all businesses experience, that doesn’t mean you can’t do anything about it, though, and if you’re not putting resources into reducing churn you’re not seeing the kind of returns or profits you should be.
Credit Cards, Subscription SaaS Billing, and 100% Avoidable Churn
Per-unit costs for most software providers are negligible, meaning payment processing becomes a major expense driver for a lot of SaaS businesses. Services like Stripe can make the tasks involved far more efficient and reliable, which is already a great way to reduce churn associated with billing issues, but as great as Stripe is, it isn’t a perfect solution.
What Stripe does is automate and streamline your billing, meaning as long as your clients stay signed up—and their credit cards process payments correctly—you shouldn’t have any problems. It’s that “process payments correctly” part that can be troublesome, because charges can fail for all sorts of reasons. Stripe notifies you when charges fail. Stunning helps you to resolve those failed charges.
Every business with more than a handful of customers has encountered a billing snafu due to problems with a client’s credit card. For subscription services, like those offered by most SaaS enterprises, this can be a major contributor to your monthly, quarterly, and annual churn rates. And it’s 100% avoidable.
Causes of Credit Card Related Churn
There are a number of reasons a credit card might not properly process a payment, and if they go unnoticed these simple errors can have a real impact on your business. Statistically, 3% of all credit cards expire every month (credit cards typically expire every three years, meaning 1/36th of them expire each month).
Add in the number of cards that are lost or stolen every year—upwards of three million cards per year—and other issues such as balance limits, fraud alerts, changes to billing addresses, and you begin to realize just how much of a problem unmonitored automated credit card billing can be.
Stripe recently enhanced their service to work directly with credit card networks to bridge the gap in these instances, meaning for many cards a simple expiration or even a new account number due to a lost or stolen card won’t contribute to billing interruptions and credit card churn, but it doesn’t work for all cards. Having an additional safeguard in place is still highly recommended.
And we still haven’t addressed the biggest issue of all: as many as 30% of credit card transactions that fail to process are due to simple computer errors. Try them a second or third time and they’ll go through without a hitch. Imagine losing more than a quarter of your business due to nothing more than a digital hiccup. It’s worth taking a few small steps to prevent, wouldn’t you agree?
Stunning Reduces SaaS Credit Card Churn
You can make all of these issues a thing of the past with just a little more automation from Stunning. When your credit card billing fails to process, our app sends an automated, personalized and customized email (or shows an in-app notification) to your client to let them know so they can address the issue. You can even include a link to take them straight to their payment information page so they can directly update or change their information.
Stop churn and turn a billing issue into a customer service win, all in one go! Be stunning—your business and your customers deserve nothing less.