Hello there, Sunday cuties!

First, let’s start with an update: I survived my talk at Affiliate Summit East last week and have gotten the pictures back from my session. If you want someone to speak with their hands a lot, I am your girl…

Can you believe we are already 4 days into August? Not to call out the elephant in the room, but imma call it out…BFCM is around the corner! And my little corner of the internet wants to help you with thinking through your retention strategies after BFCM.

Recently, the CX team at OLC and I wrapped a project with a client to revamp their overall CX and Retention strategy. One of the biggest challenges we saw was that they have a GREAT product and HIGH repeat purchase rate, however they had a serious issue with churn that directly related to unsuccessful capturing of payments. I was shooketh.

When thinking through every touchpoint of the retention journey, there was a big opportunity to capitalize on the low hanging fruit of their program....a dunning strategy.

So let's break it down together and talk about this underrated retention strategy!

Let’s Get Your Money, Honey.

Failed payments are transactions that are not successfully processed for a variety of reasons, such as insufficient funds, expired credit cards, or technical issues with the payment gateways. AKA annoying af but failed credit card payments often make up 7-10% of a businesses’ total monthly revenue.

Seems like boring stuff, BUT let me tell you…without a good frictionless recovery program you may be losing valuable revenue. And since acquiring new customers costs five times MORE than retaining existing ones, we should be looking at every possible opportunity to keep them around. Amiright or Amiright?

While customer attrition is a natural aspect of any subscription-based business, involuntary churn—caused by payment failures rather than a customer’s decision to cancel—poses a unique challenge. Failed payments are critical to address because they can disrupt financial operations and frustrate customers. Many brands underestimate the significant impact payment failures can have on customer retention.

Three common sources of failed payments include:

Incorrect Information: Inaccurate card numbers, expiration dates, or billing addresses can cause payment issues.

Card Errors: Payments can be declined due to insufficient funds or exceeded credit limits.

Customer Forgetfulness: Some customers forget to update their payment information.

As cutie company leaders and operators our goal is that we want to keep improving customer lifetime value (LTV) and monthly recurring revenue (MRR), and it’s crucial to address these issues proactively. Maintaining customer engagement and minimizing churn is essential in the digital subscription/membership landscape. Do I need to yell at you about your proactive CX?

Strategies to Reduce Failed Payments:

Implementing a failed payment recovery strategy is vital for subscription-based businesses. For instance, Wild Earth recently saw a 10% improvement in churn reduction by adopting a Failed Payment Recovery Platform (shout out to Recharge), recovering 83% of over 2000 failed transactions and bringing back $150,000 in revenue. 🤑

Dunning Emails: Automated dunning emails, sent at preset intervals, can resolve up to 90% of failed payments by reminding customers to update their payment information.

Personalized Communication: While automated emails are effective, phone calls and SMS reminders can add a personal touch, making subscribers feel valued and encouraging them to correct billing issues.

Having the right subscription platform with payment recovery embedded is critical as it can help recover at least 50% of monthly lost revenue, according to LTV+ data. However, it’s not just about handling failed payments but also about preventing churn.

Prioritize keeping your customers happy to reduce opportunities for both voluntary and involuntary churn. Delivering an excellent customer experience across all touch points, including emails and in-app messages (by apps I mean whomever you are utilizing for subscription services), is key to effective churn prevention strategies.

Your priority is to keep your customers happy so there will be no opportunities to churn — whether it’s voluntary or involuntary churn. 

And if you learn anything on this newsie, take these away with you:

Address Failed Payments Proactively: Implement effective dunning strategies, including automated emails, SMS reminders, and personalized communication, to recover failed payments and reduce involuntary churn.

Enhance Customer Experience: Focus on delivering excellent customer service across all touch points to prevent churn and keep customers engaged and satisfied.

Utilize Recovery Platforms: Leverage failed payment recovery platforms to significantly recover lost revenue and improve overall financial stability for your subscription-based business.

Anywordle…that’s all for this week and my nerding about underrated retention strategies for subscription programs.

Chat next week? What would you like to see me cover next?

❤️ Jess

UPCOMING EVENTS

1. EmpowHER (Nicole Harvey’s BB) x Sydney James are hosting a golf scramble in NYC on August 8th.
   🔗 SIGN UP HERE

2. Dillon and I are plotting and planning a very FUN AF Midcoast Presents: Casino Night for Shoptalk Fall in Chicago on October 14, 2024! 

   
   We are still in planning mode, but if you are interested in being on the list for when RSVPs are open, SIGN UP HERE.
   

3. Dillon, Nicole and I are plotting and planning SheInnovates 2!!!
   Sheinnovates is an all women’s summit for those in ecommerce. Location will be Brooklyn, NYC on November 14, 2024.
   
   If you are interested in being on the list for when RSVPs are open, SIGN UP HERE.

BEST PIECE OF CONTENT I’VE SEEN THIS WEEK…

Felt this one in my bones and still thinking about it.

richwebz

View more on Instagram

THIS WEEK’S DOPE JOBS

Rhone is hiring for Director of Performance Marketing. Hybrid in Stamford, CT.

Freak Athlete is seeking a Director of Customer Experience.

Glossier is looking for a Manager, Social Media. HOW FUN!

Alo Yoga has an opening for a Head of Influencer & Social Strategy. https://lnkd.in/gpzKGjMD

Lastly, I have lead on a BIG omni-channel company looking for an SVP of CX in Boston (not remote). If this is you, reply to this email.

👐 BONUS CONTENT 👐

This hot take from the recent AfterHours Live that I posted on LI this week.

This week, I released an epi with Danielle Dawson of Four Sigmatic. Gosh, I love this episode so much.

Secret fact: I want to get my herbalism certificate and getting to sit down with Danielle to talk about health and wellness from an herbalism perspective was just FIRE.

A WORD ON THIS WEEK’S SPONSOR

Recharge is a leading subscription management platform that enhances customer retention and drives business growth. With advanced analytics, robust support, and innovative tools, Recharge empowers merchants to create personalized, engaging experiences.

By focusing on the OVERALL subscription journey, Recharge helps brands build lasting customer loyalty and deepen connections, ensuring customers feel valued and appreciated.