How to Retain Customers and recover revenue for your SaaS Company

Subscriptions are at the heart of every SaaS business model.

It seems to be a perfect design. Customers sign up to the service, and every month, they need to keep their subscription. Simple, right?

Incorrect payment details can lead to one of the unspoken reasons behind customer losses in the SaaS industry--involuntary churn. Involuntary churn happens when a user churns out and does not know it or is unconsciously. Involuntary churn represents 7.2 percentage of churn in all sectors throughout all areas in all sectors, and 7.5 percentage of all churn in the SaaS sector.

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Let's take a look at ways that you can put these practices in your business.

Why failed payments and involuntary customer churn go together

Another aspect that is in the middle of these two aspects is to provide your customers with a stellar user experience. If you've put the proper strategies in place, you'll be able to keep your clients satisfied and make money at the same time.

Before getting too far into ways to maintain your earnings flowing, it's important to explore the concept of involuntary churn. Consider a common cycle that you may have established for your customers:

• Join the product you offer
• The payment date is set for the 28th day in that month.
• The first charge to their credit card that is on file does not succeed.
• The system will then send your customer an email informing them that their credit card has failed and that they will lose access to your product If they don't immediately take action.
• The user doesn't act but the subsequent attempt at charging their credit card for payment also fails
• Following the third unsuccessful attempt to take payment, the program suspends the account, the user is then able to return to a no-cost version or, in some cases, cancel their account entirely.

What this report can't reveal are the different elements that could be the reason for the collection of payments that have been stopped.

These are the reasons that planning for involuntary churn is vital to ensuring revenue recovery. The process can be carried out by a number of methods, such as:

• Set up a sequence of "dunning" emails that will create a cycle of payments reminders that remind your customers to change their payment processing details or card information.
•       Check how your card's details are changed internally to the system. If a customer updates their personal information, is it being transferred to your payment system properly?
• Make sure your payment processing does not have security problems at the gateway as well as preventing fraud.

Three simple steps can be used to boost the revenue of your business and reduce customers' churn, which isn't voluntary.

There are three ways you could use to make money

1. You must ensure that your customers enjoy a an enjoyable experience while collecting payments

We just entered into 2020 and we are now in an age where customers do not expect to receive the payment on a regular interval; they'd like that you collect the payment.

If you're sending out invoices, and asking your customers to pay for subscriptions at the counter, not just does this increase the friction to the process, and it may also lead to payments to be delayed. The invoices are lost and, despite not being intentionally lost, customers could not pay for their subscription at risk.

The easiest way to avoid this is to provide your customers with an effortless service when they pay for their subscription. The page that you design for payment is not limited to providing the customer with an easy user experience as they sign to sign up for their subscription. It should also be effortless to them if they want to change their payment information.

There are several options to help you make your subscriptions payments to customers easy for them to make

• Make a separate portal or a page for customers to change their personal details: A customer should have the ability to change their payment details at any time they require, not only if the payment is not success. Make sure this option is readily available to customers all the time.
• Security: Every time that users input payment details it is essential to enter the details by entering them into secured space. Keeping your customer's credit payment information safe is an important aspect to maintaining them. Are you willing to do business with a company who doesn't use a secured payment system?
• It's simple to utilize even if users are browsing via smartphones: Your customers are engaged users. Check that your website or payment processor is responsive regardless of what device that they're using. If they're capable of changing their payment information when they're in the workplace or on their commute, more likely to do it.
• Make sure everything functions properly: As great as technology can be but we all know that at times, it's not perfect. Make sure you check your cycle of payments or upgrade webpages to ensure that they're functioning exactly as they ought to. If there's an error, you might find clients have tried to change their information on their payments, but just haven't been able to.

     By using a subscription service you can collect the payment for subscriptions on autopilot. Manages subscriptions through different payment gateways and it works with all the major payments, currencies, as well as languages.

2. Allow them to breathe if their first payment fails

Payment failures happen. It's element of subscriptions.

If a credit card used by a client fails, give them some time to find out what caused it. With technology such as card updaters have come into the market, information about cards are becoming more likely to be updated on a regular basis. There are however circumstances where card details isn't up-to-date This is when dunning emails come into play.

A dunning email isn't the time to nag your client over a payment that hasn't been made. Instead, it should be used for communication with customers to make sure everything is fine, and also give customers the chance to change the information on their payments, like this dunning email from Hulu:

• Make sure your clients know why the product you offer is worthwhile: Don't demand payment from the beginning. Instead, arrange the email to remind your clients why they signed up for the product in the first place. In the Hulu example, the denning message reminds the user that they can continue watching their preferred shows in the event that they decide to renew the subscription.
• Be brief and short: Don't send a spam email that's longer than the length of a novel. Limit it to one or two paragraphs, and make sure that each is geared towards an objective. It could be to remind your customer of the benefits of your product to them. Then, you can provide a brief explanation of why the purchase did not go through. Be sure the message doesn't solely focus on the unsuccessful transaction however, it should be clear that if your customer doesn't take action, the issue will affect the subscription.
• Make a clear CTA Similar to the way Hulu used in their email above. Instead of including the "pay today" button and reminding your customer of the simple steps to "reactivate" their account. Make sure to include an easy CTA for customers to ensure that they know what they must perform to keep their subscription.

Finally, make the card changing process as easy as possible. The CTA will direct users to a card payment update webpage that responds to the device that users are reading the email in question. The easier it is for your clients to change their credit details on their card and change their information on their credit card, the more likely they will complete the process.

3. Don't be afraid to give them a second chance.

Give your clients the possibility of knowing why their payment bounced as well as working with them to offer up other options for your subscription.

For example, when the payments are not successful, do not immediately shut down their account and take them off your database. Instead, contact the individual and ask how you can do to assist them.

It is possible to offer:

• Keep their subscription but with a cheaper cost is manageable.
• Switch them to a free version of the product when you are ready.
• Shut down their account

In the case of SaaS and especially when you're selling an expensive product, it is important to not allow your customers to go scot-free after the very first time their payment is declined. Maybe they've hit financial difficulties or are unable to keep their subscription in place today. If that's the case, you can offer to move them to a free-tier of your service, or temporarily stop their subscription until they're capable of renewing it.

In the end, treating your customers well in the event of payment difficulties keeps them happy. They want to know that you can handle the fluctuating peak and valleys that can be expected with running an enterprise. In the end, holding off on their subscription instead of removing it will be more effective rather than having to undergo the onboarding process again once they renew the subscription.

It's a win-win for both you and your clients.

Recovering failed payments is key for reducing the amount of churn.

If they do not work, they do not work, it is imperative to set up the correct process in order to not just recover your profits, but keep your clients as well. If a customer's payment does not work, your initial communication with them should not be to claim their funds back. It is important to contact your customers and ask whether they're experiencing any issues or problems, and attempt to solve the problem in a coordinated manner.

Customers are the lifeblood for your business. And even if you're able to make money doesn't suggest that you'll never lose customers. But if you do the right things, it is a pleasant satisfaction for your customers that who you service and for your business.

Kimberlee Meier Kimberlee Meier is a B2B/SaaS Content Writer helping startups increase their success by using constantly updated, always fresh writing. Workshops are available at kimberleemeier.com

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