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Introduction

Potential Subscriber Loss

Decline Management Efficiency

Revenue Lift

Past Due Recovery Rate

Additional Resources

Subscriber Retention Benchmarks

Subscriber retention is a cornerstone of successful subscription commerce. However, credit card declines and failed payments are risks to subscriber continuity, leading to churn and lost revenue. Decline management and revenue recovery strategies are key to maintaining subscriber relationships.

To understand the effectiveness of these strategies, Recurly Research studied 1,200 subscription businesses over a four-month period and established benchmarks including analysis by industry and average revenue per customer.

Discover how these benchmarks can help you maintain subscriber relationships and maximize recurring revenue.

Potential Subscriber Loss

Overall, subscription businesses risk losing 7.2% of subscribers each month due to involuntary churn, a form of subscriber loss caused by credit card declines and failed payments. Reasons for credit card declines may vary, but if the decline is not prevented or remediated, the result is the same: significant subscriber loss.

Every subscription business is unique but no business can afford to lose satisfied subscribers each month due to payment failures. Mitigation strategies are a must.

7.2% of subscribers are at risk each month due to involuntary churn

B2B vs B2C Potential Subscriber Loss

9%

8%

7%

6%

5%

7.2%
7.5%
6.6%

All

B2B

B2C

  • Industry
  • ARPC

9%

8%

7%

6%

5%

4%

9%

8%

7%

6%

5%

4%

8.3%
6.8%
6.5%
6.3%
5.6%
6.2%
7.6%
7.5%
6.4%
7.0%
6.9%
7.9%
7.3%
7.8%

Consumer Services

Business Services

Consumer Goods

Education

Healthcare

OTT/SVOD

Media & Entertainment

SaaS

< $10

$10-$25

$25-50

$50-100

$100-250

> $250

This metric quantifies what percentage of total subscribers could be lost each month to involuntary churn if decline management strategies are not used.

Key Takeaways

  • Industry
    Businesses in the Consumer Services category—such as legal, financial, or other professional services—had the highest Potential Subscriber Loss rate.

  • ARPC
    Potential Subscriber Loss rates ranged from 6.4% to 7.9% for various price points.

Top Payment Decline Reasons

Declined (Generic)

Insufficient Funds

Temporary Hold

Restricted Card

Invalid Card Number

Decline Management Efficiency

Decline management involves multiple components. A successful decline management strategy ensures billing information is current using tools such as account updater services and, if declines do occur, minimizes the risk of involuntary churn with dynamic retry logic and a smart dunning strategy.

Dunning is the process of communicating with your subscribers about past due invoices. The best dunning tools provide control over both the content and cadence of communications.

The most effective decline management technology can have a significant impact on repairing failed transactions and preserving subscriber relationships.

Decline Management Efficiency measures the percentage of subscribers who were at risk of involuntary churn and were saved by these automated methods.

B2B vs B2C Decline Management Efficiency

80%

75%

70%

65%

60%

55%

50%

69.4%
75.0%
60.0%

All

B2B

B2C

  • Industry
  • ARPC

80%

70%

60%

50%

40%

90%

80%

70%

60%

50%

59.5%
72.2%
62.8%
56.1%
60.6%
64.7%
64.1%
75.0%
60.4%
64.9%
71.0%
76.5%
75.2%
72.9%

Consumer Services

Business Services

Consumer Goods

Education

Healthcare

OTT/SVOD

Media & Entertainment

SaaS

< $10

$10-$25

$25-50

$50-100

$100-250

> $250

This metric quantifies the percentage of subscribers who are at risk of involuntary churn but could be retained by decline management strategies.

Key Takeaways

  • The Consumer Services and Media & Entertainment industries experienced the highest rates of Revenue Lift.

  • Median revenue lift is higher for businesses with lower ARPC. These businesses often serve a larger customer base and process larger transaction volumes, so decline management strategies can apply to a larger universe.

Past Due Recovery Rate

Even the most effective decline management techniques cannot prevent all invoices from going past due. When that occurs, dynamic retry logic and dunning strategies are necessary, and should be used concurrently to maximize the likelihood of recovering past-due invoices and retaining subscribers.

Since every transaction decline is unique, one-size-fits-all retries are less effective. Dynamic retries, based on historical data and machine learning models, can be tailored to each invoice and result in higher success rates.

Recovery Rate measures the percentage of past-due invoices for which payment is recovered.

B2B vs B2C Past Due Recovery Rate

70%

60%

50%

40%

30%

45.8%
53.5%
34.6%

All

B2B

B2C

  • Industry
  • ARPC

60%

50%

40%

30%

20%

70%

60%

50%

40%

30%

20%

33.3%
49.5%
40.0%
28.6%
41.5%
34.7%
36.8%
53.5%
34.4%
40.0%
47.0%
55.8%
60.3%
52.9%

Consumer Services

Business Services

Consumer Goods

Education

Healthcare

OTT/SVOD

Media & Entertainment

SaaS

< $10

$10-$25

$25-50

$50-100

$100-250

> $250

This metric quantifies the recovery rate for renewing subscription invoices that received an initial decline.

Key Takeaways

  • Recovery Rates for the SaaS industry were significantly higher than other industries.

  • B2B companies often invest additional resources in personal collection efforts, too, using staff resources to augment technology-based approaches to collection.

  • The dynamics for B2B and B2C businesses vary greatly for Past Due Recovery Rate. For example, B2C companies can experience higher rates of credit card velocity and turnover due to high volumes of subscribers. B2C companies can experience higher rates of credit card fraud than B2B companies; retrying fraudulent transactions increases retry costs without increasing subscription revenue.

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