Analyzing and Increasing Recovered Revenue for Subscription Billing

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Recovered Revenue

Analyzing-Revenue2-2In subscription billing, you get paid over time, not up front - so having a stable payment method is crucial. However, credit cards and debit cards, the leading payment methods for subscription billing, often suffer payment declines. Card declines cost you revenue and are a leading cause of customer churn.

This is our last post in a five-part series about how Recurly software prevents declines, recovers revenue, and reduces churn. So far, I’ve described:

The amount of money Recurly software recovers averages 7% of revenue for automatic methods, plus 2% for dunning. As Recurly CEO Dan Burkhart explains, this kind of money matters – a lot.

In this post I’ll show you how to track and analyze your recovered revenue results – and then how to increase your recovered revenue.

Getting Your Recovered Revenue from Recurly

To see your recovered revenue figures, you export data from Recurly. Here’s how:

  1. In the Recurly web app, navigate to your Exports page.

  2. For the Data Type, choose Invoices – Summary. Leave the Filter set to All.

  3. Choose the report Time Period you wish to use.

  4. Click Download CSV File.

  5. The CSV file downloads. Double-click the file to open it. 


Calculating Your Recovered Revenue

There are three different quantities that you can track from the Recurly data export:

  1. Automatic recovery. In the recovery_reason field, filter for the values exp_date, retry, and account_updater. The total is your automatic recovery due to Recurly software.  

  2. Recovery after customer updates. In the recovery_reason field, filter for cust_update. This is the amount recovered by Recurly dunning emails, plus any additional steps you take to reach customers after a decline.  Add this to the automatic recovery amount for the total current Recurly impact.

  3. Prevented churn. Filter for prior_recovery in the recovery_reason field. This is revenue from customers who had a decline in previous billing cycles and were “saved” by Recurly processes. Add this to the other totals for the overall effect of Recurly on your business over time.

Compare your results to your total revenue to get the Recurly impact for each type of recovery. The average Recurly customer recovers 7% of total revenue due to automatic processes, plus recovery from customer updates of an additional 2% - a total of 9% recovery. If recovering this revenue also kept these customers from churning out, Recurly would be preventing the merchant from losing half of their customer base in less than a year.

Also compare your recovered revenue to your Recurly invoice. Most merchants find that Recurly software more than pays for itself in recovered revenue each month. Recurly’s capabilities in managing subscription billing are, for these customers, simply an additional benefit.

Tip. Graph your recovered revenue month to month, from each different source. This helps you quickly spot changes and optimize your results. 

Increasing Your Recovered Revenue

Here are five tips for increasing your recovered revenue and decreasing churn:

  1. Set the appropriate automatic retry and dunning period. Your automatic retries run for the same length of time as dunning. You can optimize this timing for your audiences.

  2. Optimize your dunning frequency. You may want to send dunning emails more often for consumers and less often if you have mainly business customers.

  3. Optimize your dunning content. The better your dunning letters, the more revenue you’re likely to recover.

  4. Analyze your declines. Check to see where most of your declines are coming from. Smaller vs. larger customers? A particular geographic area? A specific lead source? You might want to change your offers and your marketing to get fewer customers who are likely to suffer declines, or even churn out.

  5. Talk to people who have been through dunning. Talk to customers – and former customers – who have been through the dunning process. You may gain valuable insights that help you “rescue” customers in the future, and treat your customers better in the process.

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