How Statsbot Reduced Churn by 27% With a Simple Yet Effective Payment Recovery Strategy
High customer churn is a challenge for any subscription-based business, and Statsbot was no exception. When they analyzed their churn data, they discovered that 30% of churned users were due to expired credit cards. Determined to tackle the issue, they implemented a proactive strategy—and the results were remarkable. Their churn rate from failed payments dropped by 27%.
Here’s exactly how they did it:
Step 1: Combining Payment and Customer Communication Tools
Statsbot integrated their payment gateway, Stripe, with their customer communication tool, Intercom.
- Stripe: To track payment events and detect failed charges.
- Intercom: To automate customer communication and send timely email notifications.
Step 2: Setting Up Two Email Campaigns
They created a two-email sequence to notify customers of failed payments and encourage them to take action:
- First Email: Immediate Notification of a Failed Charge
- Triggered as soon as Stripe flagged a failed payment.
- Content:
- A polite, professional notification.
- Explanation: “We were unable to complete your purchase due to an error in the billing information you provided.”
- A clear call-to-action (CTA): A direct link to update billing details.
- Second Email: Final Warning Before Account Suspension
- Sent two days later if the first email didn’t result in an updated payment method.
- Content:
- A more urgent tone while maintaining professionalism.
- Message: “We will make one last attempt to process your payment. If unsuccessful, we will have to suspend your service.”
- CTA: A link to update billing details immediately.
Why This Strategy Worked
- Timely and Targeted Communication:
- Customers were informed of the issue promptly, giving them a chance to resolve it before their service was interrupted.
- Clear and Actionable Emails:
- The emails were concise, professional, and provided direct links to update billing information, minimizing friction.
- Second Follow-Up Email:
- The second email added a sense of urgency, prompting action from customers who might have ignored the first message.
The Results
- Statsbot saw a 27% reduction in churn caused by failed charges.
- Customers appreciated the proactive communication, reducing frustration and maintaining a positive relationship with the brand.
Key Takeaways for Your Business
- Integrate Payment and Communication Tools:
- Use platforms like Stripe and Intercom to track failed payments and automate email notifications.
- Use a Multi-Touch Approach:
- A single email may not be enough. Follow up with a second message to emphasize the importance of resolving the issue.
- Provide Clear CTAs:
- Make it as easy as possible for customers to update their payment information with direct links.
- Focus on Timing:
- Notify customers immediately after a failed payment and follow up within a few days to maintain urgency.
Conclusion
By implementing a simple, data-driven email strategy, Statsbot significantly reduced churn caused by failed payments. This case highlights the importance of combining the right tools with timely, targeted communication to address one of the most common causes of churn in subscription businesses.
Could your business benefit from a similar approach? It’s time to put your data to work and start reducing churn today!