Like the businesses that serve them, customers and their needs change over time. This can cause them to choose to stop buying products from your company, a process that is natural and to be expected. 

However, other relationships are severed with no active decision from the buyer, a process known as involuntary churn. Learning how to combat this unintentional defection will enable you to maintain your revenue and keep your positive rapport with the buyer.

Involuntary churn explained

With voluntary churn, a customer actively chooses to terminate the relationship. They might be unhappy with the value of a subscription, have no further need for the product, or choose to stop their recurring payments due to dissatisfaction. Lowering the voluntary churn rate can be a challenge since it may require you to make substantial changes to your merchandise or subscription model.

By contrast, involuntary churn happens without the customer making the decision to cancel. It usually takes place due to problems with payment details, including an incorrect or past expiration date, insufficient funds, a wrong billing address, etc. Because the causes are not directly related to your company or its products, there are simpler things you can do to combat this type of unintentional relationship severance.

Ways to prevent involuntary churn

There are measures you can enact to minimize involuntary churn rates. These include finding a merchant account with auto-updates, sending out notifications of upcoming expirations, and retrying a payment method.

Auto-updates

The good news is that there are steps you can take to keep involuntary churn to a minimum. Perhaps the most effective is to partner with a merchant services account provider who offers auto-updates. This technology uses algorithms to automatically update a customer’s card information when expiration is approaching. Alternatively, the processing company could seamlessly transfer the subscription charges to an alternative form of payment used by that customer.

Sending notifications

Another successful strategy involves sending notifications to the customer via postal correspondence or email, letting them know that their payment method of choice is about to expire. As a means of extra protection for your company, you should also ask all customers to provide an alternative means of payment in the event of an account failure.

Retry the payment

Some payment failures take place due to soft declines, temporary situations that happen due to insufficient funds, exceeded card limits, processing failures, and expired cards. Instead of immediately canceling service after one of these rejections, it is always best to retry the payment. This is true since these declines are temporary and are caused by problems with a payment processor, gateway, or network.

Some churn is inevitable

Whether your churn rates are occurring due to planned or involuntary cancellations, one fact remains true. It is vital to learn where your cancellations are coming from so that you can do your best to reduce them. This goal can be accomplished via real-time transaction monitoring. This technology tracks every facet of your system workflows, monitoring transactions as they occur to ensure overall payment health.

While a certain amount of customer churn is inevitable, you can drastically cut back on the number of customers whose relationship with you ceases unintentionally due to payment problems. Using a combination of strong communication, automated updating tools, and intelligent payment retries, you can gain an arsenal of effective strategies. Employ them judiciously, and your business can retain both revenue and its valued clients.