Churn is a key metric in subscription commerce, tracked closely by the most specialized Box of the Month businesses to multi-million-dollar enterprise SaaS companies. This is because even slight differences in churn rates can have a significant impact on revenue growth.

Understanding how to minimize churn and increase subscriber retention is a key focus for successful subscription commerce companies. It’s a significant area of focus for Recurly, too, as we are continually working to develop new technology to reduce churn. We also want to make sure we are sharing our expertise, and our newest e-book discusses key considerations in managing churn and retaining subscribers.

Voluntary vs. involuntary churn

For subscription businesses, minimizing the two types of churn—voluntary and involuntary—is imperative to ensure the health of the business. See Recurly’s benchmark data on churn rates to see how your company compares.

Voluntary churn occurs when a subscriber actively cancels their subscription, whether due to dissatisfaction or changed circumstances. To mitigate this type of churn, the brand promise has to live up to the subscriber’s perceived value. This requires multiple disciplines working in concert to meet or exceed the brand promise and deliver a great subscriber experience.

Involuntary churn results from failures in processing recurring payments, with payment declines a major contributor to these failures.

Improving transaction success rates

There are automated methods that work to improve transaction success rates and reduce involuntary churn. These include updates to payment information through Account Updater services, automatic retries of the transaction, and dunning. And there are ways to optimize these processes to further improve transaction success rates. For example, knowing the reason for the decline based on the error code provides insights on when to retry the transaction for the best chance of success, or if it should be retried at all.

In scheduling the retry, many subscription platforms use a simple, static retry logic. Recurly’s Revenue Optimization Engine utilizes advanced statistical models and machine learning to create a dynamic retry schedule that examines more variables and combinations of variables to increase transaction success rates—and lift subscription revenue by an average of nine percent each month.

Maximize your revenue

To learn more about the most effective ways to mitigate voluntary and involuntary churn and how Recurly’s dynamic retry logic works to recover more revenue for our customers, download our new e-book. This e-book also details best practices to follow and the metrics you need to measure to track your results.