If your company’s lifeline is recurring revenue, preventing customer churn is crucial to success. Subscription businesses stay afloat by maintaining a high uptime, reaching out to disengaged users and leveraging their current customer base for highly qualified referrals.
Until recently, it’s been nearly impossible to minimize loss of revenue associated with outdated payment information. Account Updater, a service which provides companies that rely on recurring billing with up-to-date financial information on customers, can ensure that your revenue stream remains as stable as possible.
Why Account Updater Matters
While very little data is available on how often a typical customer will update their billing address or credit card information, experts estimate that subscription businesses can expect to lose up to 5-10% of their business annually.
It’s not a matter of customer dissatisfaction or disengagement, but simply being unable to continue recurring billing on clients who haven’t updated their payment information. Manual follow-ups to receive accurate information from customers can be successful, but outreach can be costly for a SaaS company, especially if multiple attempts are required to make contact.
How it Works
A select number of payment processors can provide access to all account updates held by Visa or MasterCard. This is very useful for subscription businesses. If a customer orders a new payment card number, receives a new expiration date or updates their billing address, the information is automatically updated.
This removes the need to individually contact customers whose payments have declined, minimizing cost and providing less disruption to the revenue from recurring billing.
Benefits of the Program
Repeated declined payments can have a significant negative impact on SaaS companies. Manually updating payment information requires an enormous time investment from sales or customer service representatives. Finally, customers also benefit from having a positive payment experience with their SaaS subscriptions. There’s no disruption in their service and no need for them to reach out with updated information.
For subscription businesses and other companies that rely on recurring billing as a source for revenue, Account Updater is undoubtedly a positive change. Your monthly churn due to outdated payment information will be minimized, so your sales and customer service representatives can simply focus on upselling customers and bringing new revenue into the pipeline.
Are you using “Account Updater” in your business? If so, please share your experience with us.