Fintech giant Stripe has released a new churn management guide as part of its suite of billing products and services.
The guide, which advises on reducing churn and increasing customer lifetime value, is launched alongside other new and improved features in Stripe Billing, to help users better understand churn and recover lost revenue.
By launching its new churn management guide, Stripe’s clients will not only be able to better understand involuntary and voluntary churn but also be given guidance and advice on how to mitigate it.
Stripe’s clients will now also be given access to new revenue recovery features as part of this new churn-mitigation strategy, including a new revenue recovery interface, new options for recovery automation and new revenue recovery analytics.
Churn: The understated problem for subscription services
Churn is perhaps a more significant problem than most subscription-based services realise.
Recent research from Stripe has revealed that 25% of all churn is involuntary, and of these involuntary subscription cancellations, those subscribers that are recovered typically stay subscribed for another seven months on average.
Of course, the benefits of reducing churn are starkly apparent, but it is becoming even more important given the rise in customer acquisition costs.
Per Stripe’s research, the costs for businesses to onboard new customers have risen 60% in just the last five years, meaning that retaining existing customers is, today, up to 7x more cost-effective than acquiring new ones.
Therefore, deflecting churn by recovering failed payments (involuntary churn) can lead to a direct uplift in revenue for subscription-based businesses.
Indeed, 2023 saw 41% of subscription businesses report a rise in involuntary churn, while voluntary churn was only 3% higher at 44%.
In 2022, Stripe’s automated payments recovery features have helped recover an additional US$3.85bn in lost revenue for its customers. So, with the release of its latest upgrades and churn management guide, Stripe is making it more efficient for subscription services to recover lost revenue.
Leveraging machine learning to identify phishing content on invoice emails of fraud-flagged merchants, Stripe’s suite of products also mitigates the impact of fraud on businesses to help them focus on the payments needs that matter to them, reducing churn chief among them.