Subscription Lifecycle Growth in 2025

Hi, everyone.

My name is Dylan Heffler. I'm VP of product marketing at Work Hurley. I'm based here in Austin.

But super excited to be here with the people on the panel tonight, so I'm gonna pass it to them for some introductions.

Thanks, Tony.

Hey, everyone. My name is Abin. I'm last year, product manager at Codecademy.

With Bior, I lead, growth at Codecademy. So I'm thinking with conversion, retention, maintenance, authorization. That's our stuff.

Yeah. Alright. First time in Austin, excited to be here.

Hey, everyone. I'm Shagene Shao. I am from LinkedIn. I lead the payments and business platform team, at LinkedIn.

First time in Austin and Texas and excited to be here.

Hey. Nobody glitters to reach you, Ecolab. I lead the tech party ecosystem, WebAdrian, where we help quickly start, scale, and optimize our subscription billings.

One of the things that we were talking about, twenty twenty five, I was talking some other folks here too, is, how difficult acquisition has become.

We we we got a third of the early. We've got every year or or state of subscriptions. I think in January, we're, on twenty twenty five. And so some of the the data that's come back in that is in the last four years we've seen the rate of acquisition, the median average of acquisition rate decline year over year four years in a row. This is this is cut across all industries.

But what is interesting about that though is twenty percent of the people that were acquired were people that had used the service before. So they had come back.

Right?

So that means that by connection we're going to have a consumer, subscribers, as I think that much may important.

And optimizing the life cycle. Right? So I'm curious what kind of challenges you've seen in trying to optimize the consumer life cycle and trying to connect to display data sources and teams to make that life cycle just, like, really on point?

At LinkedIn, I think acquisition wise, we're doing pretty good, and we've seen some, good growth. It's actually the retention that, we're trying to solve for. And, it's like that golden snitch in Harry Potter that everyone covets it but nobody really gets it. It's really hard to capture that. And, what we've learned in the recent years is teams our teams try to optimize for the bookings, like, hey. Can we increase the price? So we'll get more maybe less customers, but then we'll be making more money.

But then we realized that the quality of the customers that we were acquiring was actually not good. We would acquire some customers, and then we'll lose them very quickly.

And so to solve for that, what, we did was introduce, like, a couple of strategies to measure our experiments to measure correctly that what's not just the acquisition or the sign up improvement, but also what is the retention for these different cohorts. So we started doing one of these two things. One is if we're doing any acquisition experiment, hold it for two weeks, make a decision to launch it or not, but then look at the customers that were acquired for those two weeks over a period of six to eight weeks to see how many of them survive, which is they go from free trial to a paid subscription, and then how many of them even renew after that. And that gave us a solid understanding on what acquisition and retention strategies were really working for us in the long term. The other thing we did was we just simply hold out our experiments for six weeks to truly see the impact on the survival and retention.

And one thing that the teams introduced is a long term holdout for several quarters, so like as long as a year to truly capture, the impact of, any acquisition and retention strategies, over long term.

Thanks, Shane.

Yeah. So for folks who aren't aware of Codecademy, we're an online learning platform that, helps folks, learn how to code.

One of the things we've been seeing a trend of is that, when folks arrive on our website and create an account, it's really important for us to be able to serve as relevant content to them as soon as possible.

Basically get value in front of the customer as soon as possible. We have a pretty big catalog of, free and paid courses, and if we were to leave customers up to their own, you know, to navigate the catalog, figure out what's right for them, and, see see what meets their goals. That is a process that introduces a lot of friction and, would lead to lower conversion. So what we did was introduce personalization into our onboarding flow.

We asked folks, what are your goals with using our platform? Are you trying to change your career? Are you trying to learn a new skill? Are you just here for fun to learn coding?

And then based off of, answers to those onboarding questions, we would recommend, targeted content and features that would help them get to that goal. Now, past that, after folks create a free account and start learning with us, we also had some challenges with, helping them understand what our different subscription products offer. It's, to for folks to arrive at a checkout page, you know, within a few seconds, it's crucial that we communicate what, the value differentiation between these different subscription products is, what the different billing lengths, involved are, what payment method they should use.

So having that communicated in as concise and frictionless format, has been very important in terms of optimizing conversion.

Yeah. And I could add to that. Right? Two themes that we're hearing is is both, using data to understand your customer and then using personalization to figure out how to keep them. You know, one of our clients is in the CPG space.

They're spending a lot of money acquiring the customers, but then they noticed that they were churning and, at that point they took a look at the data and to see what's actually happening and they noticed that around the holiday season is when they were turning and they weren't coming back. And so serving the customers, understanding their needs, it's it was a pet food company. And so a lot of people were going on vacation. And when they go on vacation, they were taking their pets with them. So obviously, they didn't eat the food. And so at the point of cancellation, they would introduce the ability for the subscriber to pause.

And what that's done is actually helped them increase the LTV of those customers by eighty percent, right, which is a pretty significant, markup for them. And so just by understanding their clients journeys what they wanted to do they were able to build stronger ties to that community.

The state of the subscription support I mentioned we saw this last year there was over sixty percent increase in paused subscriptions. I think that speaks to the flexibility people are looking for and like being able to offer that as like optionality for subscribers becoming really important.

So to be able to make a decision like that like you need to look at data We talked about like a lot of different flows that are working across a lot of different teams. How do you how do you create coordination between those teams to create a really successful consumer life cycle and then what what data, what metrics do you rely on?

Derek Wang (three fifty seven): I think having a shared set of metrics is critical, in ensuring that we're all the different teams are working towards the same outcome.

It's very important to have a funnel level view for us, where we look at everything from the top of the funnel, like, how many folks are landing on our website, how many are creating accounts, down to the conversion level, the payment successes, and then down to, retention and renewal. And when we have that broken down, we can quickly identify, you know, when things are changing or going wrong, and we're have the ability to make changes and, improve from there.

Something else we also do is, frequent cross functional touch points where folks from marketing, product, finance meet and look at these same shared metrics and, get an understanding of how each of our projects contribute towards those metrics and what we can do to improve them.

Lastly, I think transparency is incredibly important, for us, we have a company wide dashboard that shows everyone at a glance how our content's performing, how our conversion is doing, how our business is doing. And every month at all hands, we have one of our folks, explain, what's happened in the last month. And that helps, folks across the company come up with ideas and suggestions for, what to build next, how to improve, and, that fosters a lot of collaboration.

That's really cool. I love that.

So for, a lot of our partner teams, we work very closely with, our business development team, and then there's this new offering, that I think this provides that with your premium subscription, you get certain other subscriptions, for a small duration of time. So you buy a LinkedIn premium, you get three months of com free, you get three months of Microsoft three sixty five or three months of BetterHelp.

And that's been a really amazing partnership. And I think one thing that has really worked well is like a shared OKR, a shared metric that each team both the teams are driving. And in this case, it is increased sign ups.

And it's not just that one metric. Now, actually, all of these teams report up to the same leader. So there's one VP, through to which the business development team reports, the product and eng team also reports. So that really helps, bring accountability, all the way down. The second thing is, well, when you look at subscriptions and growth, when we talk about acquisition, retention, at the center of it is the value that the product provides. So there are two teams, that always work in tandem, which is the value team, the thing the team that's always thinking of new features, value propositions that go with the subscription and balance it with our acquisition and retention strategy.

One example I'll take here is, LinkedIn is a premium product. So you can use the product without subscribing to it, and then you can subscribe and you get additional features.

One thing when we notice that when people cancel, they often say that, you know, I didn't really get a a lot of value from the subscription. Like, can you remind me what exactly were the premium features? I thought everything was free. So what that value team worked on is, making sure that the branding of the premium features was very clear. So when you talk to somebody, using LinkedIn messaging, if whoever has a premium subscription, then you'll see a golden bug in front of their name. You're using certain features like you're trying to look for people, and searching it on LinkedIn. You'll see filters which are only available to premium customers.

And then if you are, not a premium subscriber, then you will see these features which are logged out, and you'll clearly see the clarification that you can get premium and actually unlock those features. So that kind of differentiation helped create value for the product, which in turn helps the acquisition and retention. So the, not seeing portion of both of these teams is very critical to, drive value and the acquisition retention.

Yeah. It's interesting that you talk about, value and maximizing the benefit of the product.

One of the clients we were working with, it was a really interesting use case where their product team was creating different bundles or creating different products, and they were launching it to their customers, for free because they didn't have the billing agility to build those unique pricing models, to offer it. And then what ended up happening was the clients loved it, but they were so used to receiving it for free that when it came time to monetize and their tech team build out the capability, then nobody wanted to pay for it. They're like, wait a minute, I've been getting it for free for six or nine months, like, why are you trying to charge me for it now? So it's super critical to have the right infrastructure in place within the organization, so as you iterate these different pricing mechanisms, you actually could actually charge and show the value to your users.

Can't talk about life cycle without talking about churn. Let's just talk about involuntary and and voluntary churn. So involuntary churn, which can sometimes be like twenty to forty percent of all churn. I'd love to hear how your teams are combating that, especially things like like failed payments that your customers run into.

So we do a lot of things for combating involuntary churn.

Just like starting from when the payment fails, we try to use account of data. Actually, even before we try to charge a customer, we use an account of data.

It could be a batch one, where we make sure that we have the latest card information for our customers. Then when we charge the customer and it's sales and we use real time account updaters, from our payment processor, which in real time, in the moment, update that information. So that really helps us, fall back on these cards, that the customer has updated.

We also have something called a smart routing, which is our in house, routing of transactions to a payment processor.

You build this using machine learning and based on a list of parameters, it identifies which processor to send this transaction to for maximum approval. Right? And I can get into more detail as if we talk about AI. Okay.

And then once the payment fails, we do global alerts, which is you will see a banner when you visit LinkedIn. You will get emails. You will get notification on your phone, a push notification, or a notification in the app. But, basically, we make sure that the customer is aware that their subscriptions failed or the payments failed, and that they are gonna lose access to the product.

The one thing that we have diligently built is a thirty day grace period. So from the day when your payment fails, the customer gets thirty days to still use the product while they're trying to figure out how to fix that, payment failure. So that helps us control involuntary churn, and there we all measure it. Like, if there's an entire funnel, like Avi talked about, which is how many customers it'd be the payments failed, how many did we recover.

Some of them, actually, when we tell them about this failed subscription payments, they actually go ahead and cancel the subscription too. So we we all obviously see that as well where, some voluntary cancellation is hiding in that, involuntary churn bucket.

Yeah.

A lot of what we do is quite similar. I think with any product where you have free trial leading to, an attempted conversion, you are gonna have an involuntary churn. And we see that more frequently with certain geographies, than others. And, the reasons why, folks churn is also, varies. You have, you know, sub cards running into low funds.

You have some that are missing information.

Some have bank specific issues. So it's I think it's important to identify why exactly folks are, churning involuntarily.

Now, what we've done to combat that is, we built out we extended our Dunning's, life cycle period to be longer, actually similar to, what, LinkedIn has. It's close to thirty days. That gives our customers time to update their payment methods and resolve any issues that they might be having with their card. And it also gives them an opportunity to reach out to our customer support and, you know, request a cancellation or a refund if they need to.

We have also implemented an in house, on platform reminders for folks that, failed a payment. We were running it to the case that a lot of people didn't realize that their payment method failed. And, you know, before we had those on platform notifications, people wouldn't be able to tell that this had happened. So having that notification with a easy link to update their payment method, really helped us how we capture, some of these failed payments.

And lastly, I think offering flexibility in payment methods, really helps customers be able to choose what the method they feel is best suited.

So forcing them to go through, for example, a traditional creditdebit card, if that's not their more most relevant payment method isn't necessarily guaranteed to get you success. So offering flexibility on your checkout page, can also help you combat involuntary churn.

On the voluntary churn side, like, low engagement is the the biggest indicator that somebody's going to churn. So I'm curious. It's a million dollar question, right? Like, how do you how do you improve engagement?

But I'm also curious, like, what are the things that you've tried that have worked? What are the things that you've tried that have not worked? Right? And what would you recommend that folks here go take home and, like, tactics we could try or experiments we could run to improve engagement?

I think there are a couple of things, that we've tried. The first one, like I said, was continue to increase, the value of the product.

So every time like, very frequently, we introduce new features within our premium offering so that the customer feels that difference between the free and the paid product.

Some examples are, like, the perks that I mentioned, custom CTA where you can direct people to a website that where you write or your newsletter or to a book an appointment page. So that gives people more consistently and often something new to look forward to.

And this is across, like, as industry evolves, we've, like, a lot of new AI features where you can update your profile, you can use AI to write a message. So all of this keeps the feature set fresh, and there's always something new that the customers look to when they come to LinkedIn. So that value proposition piece is very critical.

Second is the branding that I mentioned. Like, we are very cognizant about that, and we make sure that people are aware that the value that they get. And the third thing that, is very interesting that we've tried and worked really well for us is, whenever we get an opportunity where we have to notify a customer or talk to a customer, we make sure they are aware of the value that they are getting from this subscription.

And, my two favorite examples are, when a customer goes from a free trial to a paid subscription. This is, I believe, like required by, several of our regulations and partner requirements that you need to send out that email. We use that as an opportunity to highlight that, hey. We're going from free trial to paid subscription.

This is the value that you're getting. So it's not just a customer is notified about the price that they're going to pay, but the value that they're gonna get. We do the same on cancellation as well, where we try to iterate on what are how they have used the product in the period that they had subscription for. So it could be something like you've used InMails ten InMails to reach out to people you are not connected to, or you use these search filters to connect re identify people who are hiring.

So that again helps us reinforce the value that product, offers and helps them make that decision on, yeah, I really want to use this product more and can wanna continue using that product.

Yeah. And it's interesting. Right? Because, when you think about subscription, subscription fatigue is something we hear, and you pointed out in the beginning of the call, where people wanna disengage from their recurring, subscriptions. At the same time, when you survey folks about personalization, they're willing to stick with subscriptions if they're personalized, and that's the perceived value. And so figuring out who your customers are, following on that journey, and then giving them value in different ways of engagement is what keeps them.

Yeah. Echoing what, has already been said, there's, I think there's two levers to voluntary churn. One is, providing ongoing value through engagement, which will be most effective in helping people decide not to Churn. And then there's a second where when people have decided, what can you do to recapture them? On the first side, in terms of providing engagement, what's worked for us is allowing people to set goals.

For example, if they want to sit down and have three learning sessions a week, they can set that goal and we can send reminder emails, reminding them to, come back to our platform and start learning.

So helping them engage and reminding them is one way to combat it.

Another way is, to, be able to reward their progress. Folks want to be get that feedback from as they progress through using your subscription. And, for us what's worked is, gamifying some of that experience. So as someone completes a lesson or completes a course, we provide them XP towards, progressing on a leaderboard and being able to measure their progress relative to other folks is both a motivator and, an encouragement tool.

And, that's one way that we've, combated, lottery churn. Something else that's worked for recapturing, folks is when we kind of flipped the script on the cancellation flow, we used to have a survey at the end of the cancellation flow that would tell us why folks are canceling. And, an idea I had was to flip around and ask folks why they're canceling before processing it. So keeping it to two steps.

First step is ask folks why they're canceling and if it's, a reason that we can help with, such as price or time, then offering an incentive at the next step, for example, if it's price, we would offer them a discounted early renewal. If it was time, we could offer them a pause subscription or an extension to their trial.

And we saw an incredible amount of impact from offering, that redesign cancellation flow and then attaching incentives to it. We also attached value reminders for folks that had kind of not discovered some features. This is kind of our last, pitch to them that we do have all these, awesome content and features that you could benefit from. And just before you go, we'd like to remind you of that. And, all of that has helped us, reduce trial and subscription cancellation rights.

I like that. Value reminder, the bar will still be open after the panel.

Who here works at a global company or is expanding into new markets next year?

Some of you. I I'm we talked a lot about we talked about this before, some of the challenges people face and, like, unexpected challenges, the unknown unknowns as they start to expand into new markets. So, Dimitry, what are some of the things that you see brands run into?

Yeah. It's interesting. This past summer, we ran a survey with thirty four thousand individuals globally to understand what are their, you know, trends. What what are they seeing from from, the subscription billing ecosystem?

And it's pretty interesting. They quoted APMs as a key, statistic in it because as folks around the world, they want to buy in their local payment methods, right? We call it alternative payment methods, but they're actually local, in those markets. And the interesting trend that we saw was around forty percent of the surveyors, wanted to pay with credit cards or debit cards.

There was also thirty percent that wanted to pay with digital wallets, and then thirty percent by bank. And and it's pretty interesting because even in in the United States, right, historically, credit and debit has been the way to go, But now we're seeing that trend also, conform to the global to the global norms.

And it's market dependent, obviously. Right? In places like Germany, you see a lot more pay by bank or by PayPal. In places like, China, Alipay, WeChat Pay.

And, even in North America, we're seeing more of these digital wallets becoming the preferred payment method by by users. So it's as you continue to go global, you wanna act local. Right? And that means by offering the the payment methods and also by the local currencies, which creates, different challenges.

So, you know, we were talking about it earlier, as as you offer the local payment methods, you also try to do dynamic pricing for that particular market. Well, you know, users try to take advantage of it in some cases by getting VPNs and trying to subscribe to, you know, that particular service where it's more favorable from an FX perspective. So then you need to start monitoring for those things to ensure that the risk reward for your organization meets the challenges that you have. But overall, it's still important to follow the user and give them what they want in terms of payment methods and currency.

The, or I just I saw this this morning, so I'm thinking of it, a reminder of, like, how much the world has changed in twenty, thirty years. I saw a clip of Bezos saying the first payment they process for a country in Eastern Europe, I can't remember which one, was cash. And so the person mailed them, I think, like, forty dollars in the mail.

Can you believe it? What what what are some other things that you've seen is, like, maybe unexpected things as you enter into new markets?

So, one thing that I think it depends on what stage you are in or the company is as you think about international markets. If it's your day one, you're introducing the product for the first time. I would say maybe payment methods is not the highest priority. Maybe you wanna use the global payment processor like Adyen that you have.

Maybe that country already provides credit card, debit card support. So that's a good way to enter a market without worrying too much about the local payment method, assuming, like, the target audience, uses card. So the thing that and then that first stage is more critical is that product market fit of whether there is value for the product in that market. And then if it's priced correctly, to, Dimitri's point earlier that, pricing the the what's that word?

The willingness to pay is very different across the globe. And so it's very critical that, the product is priced according to that local market. And not just the price, but also the discounts that you offer are also adjusted accordingly. Maybe people in certain geographies are used to discounts and a lot of discounts and different variety of discounts.

So it's critical to have that right combination of the price and discount as you introduce, the product. And then in general, I think I feel like whenever you think about international, there is always different kind of regulations.

And in the just last couple of years, subscription has seen a lot of regulations coming out.

And and I think a lot of them make sense, because it makes sense for the customers, that they are none of them none of the features are essentially being abusive.

So it is very critical to keep that in mind as you, go into the new markets. A few things that come in mind is, maybe you have a checkout flow that works really beautifully well in, US, but when you go to Europe, you'll need to keep in mind that there is three d s two verification. So there is two f a. There are gonna be more steps.

So you need to not just implement that, but be ready for the fact that your checkout rate is gonna tank. And so it will require more optimizations, across all of the parts of the funnel to make sure that the the performance is at par of what you see in other markets. And wherever there's money involved, there's always abuse and regulation. So if you are in that scaling stage, where you've been present in an international market for a while, what we learned personally was, like, there is a lot of abuse and, regulation.

So you need something like a trust and compliance team. And I have a one PM on my team focused completely on that because abuse just keeps evolving. They abuse one way, you learn about it, you fix it, there is an it they use some other technique next time. So that's a constant, work stream, if you may, that needs to be propped up, especially when, international markets are involved.

Yeah. I think, localizing fully is quite a resource intensive task.

And for many smaller to medium businesses, it's not necessarily worth it. So I think picking your key markets to localize in is important, and, adjusting your marketing materials to, develop trust there is, is important too. In certain countries, like folks want to know that, you know, you, your company is actually serving them as it is. You're not just a foreign company that will take your money and then you have no recourse if something goes wrong.

So I think developing trust is important, and pricing is also very key in terms of being able to offer localized currency. A lot of payment methods, incur heavy fees, when converting to a foreign currency. So that's, I think, the bare minimum that you need to do to localize, in international markets. Taxes can also be challenging.

I think taxes, you know, they don't change often, but they do. And when you're in a lot of countries, when things change, you might run into this. And sometimes if you're not charting taxes and the tax authorities come to you later being like, Hey, you owe us this much. That can be a challenge.

So before expanding, it might be a good idea to take a look at what the tax laws are.

And I think, being able to offer customer support, in the geographies that you're expanding to is also very important because, especially if you're not a brand name, folks are wanting to know that they can trust you to be able to provide support if something goes wrong.

Before we open it up and take questions, I'd love to hear from each of you. Going into next year, second half of the decade, what are the different trends you're tracking? Where are you focused on innovation?

So AI is definitely top of mind. And, like anything in subscription, it's spread across, the funnel.

We're looking at AI and machine learning for starting from upsells, on what kind of upsells do our customers see for premium products, for buying that subscription.

And so we do, testing on a lot of copies.

There's one interesting example where we tested was, try now for free versus try now for zero dollar. Any guesses which option worked better, one the first one or the second one? Second.

Second one. Yeah. There's, like, a huge difference in acquisition when we use that dollar zero sign.

So there's a lot that goes on where we leverage AI in our upsells to educate our customers the value that the product brings. Then we are also using AI for dynamic payment methods. That's something that is top of mind on how do we show the right payment method given any market, currency, and that customer behavior so that they are not bombarded with a list of ten payment methods that are available in the market. Leveraging AI to predict the payment couple of payment methods that the customer may choose from.

Then, in routing, we specifically use smart routing, where we look at country, currency, the payment performance, the approval performance on a particular processor, our selling entity, and then determine that for a given transaction at a given time in a country, which processor should be route this transaction to for maximum approval rates. And I think that has has a huge impact, and we're continuously evolving that, to improve our models. And we're actually extending that, not just to our authorizations, but also to our retry. We're using AI to determine what is the right retry schedule. So for that thirty day grace period I talked about where payment fails, like, when should we try?

If you try to charge a card in India at two AM, for sure, banks gonna think that it's a fraud. So finding that right finding that right time, to charge that card is something that we're leveraging AI for. And, again, I guess, we reach out to customers for different email copies. We use a lot of AI to come up with the the right copy that will work for the set of customers. So end to end the entire, funnel, we're using, AI extensively, and then the plan is to continue to invest in it.

Yeah. I'll I'll jump on the AI train.

I think AI has, substantially changed the learning market and, what companies in our space have to do is adopt it and, use it to form the most effective learning method possible.

So some of the things that we've done are integrated into our personalization flow where, you know, as folks interact with the platform, provide us more information, we can then use that data to serve them back more tailored recommendations.

We can help them, improve on, errors they're making, provide suggestions. And we recently launched a new feature, where folks are able to, create custom projects. For example, if I wanna if I'm learning how to code and I wanna build an app that ranks the hotels in Austin, now we have a tool that can tell you exactly how to build that app.

And I think that's something a lot of our subscribers were looking for.

Because a lot of our subscribers are also looking to change their career and level up their skills, we've, integrated AI into our platform, in the form of and, a job readiness checker where it they can measure your progress on our platform and see how ready you are to start interviewing for roles. We also have an interview simulator where you can, do a mock interview, for a role that you've specified and kind of, learn how to improve your interviewing skills and come into that interview fully confident.

We're also using AI to, gamify more of our content, so it makes learning more fun. I think, most folks don't find it, you know, find it challenging to spend hours and hours learning. So anything we can do to make the experience more fun and more rewarding, is, something that will improve engagement.

Yeah. And from our side, it's it's really interesting because our core mission is to add value through payments to our customers. Right? So we continue to do two things. One is optimize what I call the payments triangle, which is author rates, cost of acceptance, and fraud, and continue innovating that space to make the lives of our clients and partners as easy as possible.

And second is really following the customer journey in how they wanna interact, with the various clients, merchants that they use. So, for example, like, in the subscription billing, a lot of it has been in e com, but can we bundle that in the in person experience?

So if you're at a store, let's say, you know, you walk into, Pret, and you wanna subscribe to a coffee plan, then you could do it at the point of sale, right, to loyalty and and lifetime value of that customer beyond just that, online transaction into the in person relationship.

So we're continuing to innovate with our partners in that space to continue delivering new products and services and and new innovative ways to deliver that personalized experience, downstream.

Thank you. I'd love to open it up for the audience now. You've got a a captive panel here. They're not allowed to get up. And they knew all the these questions, but you can stump them. Is there anything that you've got that you wanna ask? That's top of mind.

Hey. Yeah. Great presentation.

My name is William. I am a product manager for Yahoo. I work on payments and subscriptions.

So one challenge I've been dealing with is, as a payment platform, we try to work with our internal partners to, on one side, increase the conversion and the success rate, and at the same time, we need to try to apply measures to prevent fraud transactions and future chargebacks. I just wonder whether you have any insights to share on those trends, best practices or like learnings, that would be great. Thank you.

So, one thing that we try to do is, across the two teams so we also partner with, our, there's the payments abuse team that actually covers all things, related to just a regular abuse where people are trying to use a bad credit card, and all the way up to chargebacks.

We try to align our OKRs as much as possible.

And, we have the when we look at metrics, we qualify our metrics. So there is three kinds of metrics. First is true north, one thing that we're all trying to achieve in life. Second is sign up metric, or sign post metric, which tells us that we are on the right path. And third is guardrail, things that we should avoid doing. So from that metric perspective, what we look at is our true north is bookings.

That's a dollar value. The signpost metrics is our sign ups that more people sign up. And then there is a retention metric. Both of them needs to be healthy, which will give us confidence that the booking's gonna be achieved.

And the third metric for Guardrail, we typically rely on our trust metrics, which includes anything like how much abuse is happening on the platform and also looking at chargeback and refunds rates. So looking at these three metrics holistically, gives the entire team and organization a full view into how that subscription ecosystem is performing. And you just look at the first two metrics at the expense of, chargebacks, and we don't get the full picture. So looking at these three set of metrics, not just for subscription payments, but across our product org is something that we do to make sure that, these guardrails are in place.

Yeah.

There's two things, I think, that are important.

First, I think, to be able to, effectively target, you need to segment, your data. You need to look at it by, you know, plan type, billing lengths, geographies, and figure out, which segments are underperforming or have opportunity for improvement. And once you've identified that, you can start finding the common threads there and follow those.

For example, if you're finding, trial conversion rates are low due to involuntary churn in a certain country, that gives you a threat to pursue, like, maybe you're not offering a local payment method and you need to be doing that, or there's something specific you're missing, like, could be three d s or something like that. I think segmentation gives you a lot of insight into where to start.

Once you have where you start, I think more market research, gets you further.

And then you have specific problems to solve.

In terms of combating, you know, customer complaints and stuff like that, that's actually an area where we've integrated AI, as the first layer of, customer service responses. So a lot of customer tickets that come in are similar. It's like, I wanna cancel my trial, you know, I missed a payment. I wanna cancel the subscription, something like that.

Like, they all have common threads. So what we've done is implement these straightforward requests. We are able to just use AI to, you know, issue a refund or a cancellation and, they don't from the customer side, they don't have to wait long, periods of time for resolution. They're satisfied, you know, it's instantaneously they get the resolution.

And then for more complex cases where, AI is canceled for that and there's a human touch needed, those complaints are forwarded through to our, team and they can deal with it, and then, achieve customer satisfaction in their response.

Yeah. And from a foreign innovation perspective on the payment side, some carriers in the market, are getting really weak with their tools.

And so you can actually work with a partner where you're able to change the fraud parameter to your specification based on the learnings from testing and see projected value where you think it'll go. Right? Right? And then from there, you could do kind of AB testing of different parameters to to see if it gives you the results.

And then when you're able to get, that'll find that use case, of the tool or the bad actors in the ecosystem, There's also, like, the ability for you to drill down and see exactly the levels of that particular individual, you know, what kind of parts are they using, what IPs historically, etcetera, to know whether you should accept or decline that that particular virtual in action. And the other side of it from a fraud perspective is not just blocking, fraud, but it's also how do you, reduce false positives. Right? And that's a huge area of improvement too.

So there are some tools available, to help with that as well. K.

Thank you for your question.

On the, subject of disputes, And we're curious to know how each of you are thinking through Visa's, new VAMP program that's coming down the pipe.

That's gonna start, April first of of twenty twenty five. And unfortunately, you know, subscription and recurring payments merchants generally have a higher proclivity to disputes than other, you know, merchant payment methods or payment models, I should say.

And so, with Visa, you know, changing the threshold from nine tenths of a percent to three tenths of a pursuit at the acquirer level.

So, Dimitri, this is probably a great question for you.

At the acquirer level. But the, merchants will be monitored separately, as well. But it's gonna be on the the processor to actually police it. And with Visa saying now, if you're over the three tenths of a percent, all of your disputes will get an additional five dollar fee.

And if you're over the five tenths of a percent, which puts you in the excessive program, that's gonna be ten dollars, per dispute. I just wanna know how you guys are, you know, figuring out, you know, you know, you're working with your processors and, you know, you know, how that's gonna affect you essentially, because, you know, there's tons and tons of very, very good reputable merchants that just it's not their fault. It's just the way the issuers are handling disputes and enabling cardholders to, you know, take the easy way out. It puts you at a little bit of risk from that, you know, financial risk, not a huge risk, but, you know, some merchants are recurring, you know, if they're if they're recurring as ten dollars or nineteen dollars, that's gonna hurt a lot.

Now, you know, LinkedIn is ninety dollars average, you know, monthly, and we're not exactly sure what, you know, Co Works is, but, but it's it's gonna be a real issue. So I'd love to hear, you know, kinda how what the approach is at least today. I mean, I know there's a lot of gray area left to to to manage, but it'd be interesting to get the early thoughts.

Yeah. It's an evolving topic. Right? And just like anything, it will get better with time as we kind of better understand it.

The thing is it's gonna depend on the industry. Right? Different segments are gonna have different types of, levels of disputes and how it works. At the end of the day, like, having the data and being able to make the right decision for your organization, is gonna be mission critical.

And so the way we wanna combat it is just to give the tools and work, with our with our merchants to just understand it and and deal with it on their side. Like, one of the things we do, which we're really proud of, is we have a really unique AM to merchant ratio. Right? And so as a result, we're there constantly, you know, doing QBRs, with with our merchants.

And so it's gonna be a part of that conversations. Like, what are we seeing? What are we you know, how can we help you? What are you seeing in your side?

And and having that relationship to make it worthwhile because it's not gonna be one one size fits all.

Yeah. For LinkedIn, I think what Avi mentioned earlier was, looking at this problem just, like, much before it gets to that dispute, resolution, situation. It's more at, like, how easy it is for our customers to cancel.

And, what we've done is, when you go to LinkedIn and when you go to that my premium features page, there's a very clear button which tells the customer, like, how they can manage their subscription and the actions that they're able to take. So making it very easy for them to cancel is something that, we're trying to work on. Also, we have this feature called as RoboRefund, which is essentially that you reach out to you don't even need to talk to a customer agent, but you go to this LinkedIn help center. You'll find this article to request a refund after once you are a paid subscriber. And then if you try the product, you've used it for seven days, you're not happy about it, you can request a refund and no questions asked. The entire amount will be refunded for you.

If it is beyond that seven days, then we do allow customers to reach out to our customer support team and then request a refund. And case by case basis, it can be handled. So the customer support part of it, the robo refunds, and that easy cancellation are the ways in which we're trying to combat this problem in a way where it doesn't get to that situation of, disputes and chargeback. But, yeah, we well, like Dimitra mentioned, we do keep in touch with our processors to track how we are performing through our regular QBRs to make sure that we're not hitting those, threshold and are not part of that granular way.

Here's what Yeah. I think it's important to first, look at your baseline, rate. Like, if, you know, you're looking ahead six months and you're in danger of, actually exceeding that threshold, I think there's more substantial changes than needed than if you're, you know, currently under that threshold.

So I think one of the most effective things you can do is figure out where most of your chargebacks are coming from. Are they coming from annual renewals? Are they coming from, like, folks who sign up for the discount? Like, are there common threads between the chargebacks that you're getting and the ones you're losing?

And that gives you a head start into figuring out what you need to do to adapt and, reduce that rate. And then from that, reducing friction is the name of the game.

Taking a look at how many steps it takes, a user to go ahead and cancel and get a satisfactory result is important, and also looking at the visibility of it, like how easy it is for someone to discover where that functionality lies.

I think transparency is also important.

I think more communication with subscribers when they have a renewal coming up, or when they're ahead of when they're about to be charged, so we can give them as much of a heads up as possible and offering pass throughs resolution within that communication will, encourage subscribers to go through, cancellation instead of requesting a chargeback.

And I think worst case, a strategy that could be used to combat is like, proactive refunds from cohorts that are likely to request a chargeback.

I think that's kind of a last ditch scenario, and and that's what I would do if, like, I really needed to get our rates under Visa stretch.

Thank you for being here tonight. I think all of you like, really, I look. Your time is so valuable. I really appreciate you spending a little bit of time with us.

If you have questions, we're still gonna be here. We can have some drinks and food. If you have questions for anyone from Recurley, there's a few of us here you can find us. Thank you for Adyen for hosting with us.

There's also a few Adyen folks here, so please come seek us out, find them. Thank you. Thank you to the panel. Can I get a round of applause for them, please?