How to prevent payment failure churn

Building a business is hard. Building a business while having churn problems is harder. On average, 25% of churn for subscription companies comes from failed payments. It may seem unavoidable, but it can absolutely be mitigated. I'll walk you through how to prevent it. First and foremost, you need to take steps to prevent users from ever failing a payment in the first place. Easier said than done. How do you actually do that? 1. use a payment processor that has automatic card updates. Hard to fail a payment when you have valid info on file! 2. Proactively identify users that will likely have a payment issue and inform them ahead of time in your app ONLY. Using other channels can drive higher voluntary churn. 3. Choose the payment methods you support intentionally. Prepaid cards = more failed payments. 4. Validate cards when a user updates them in the system. You don't want someone attaching bogus info. 5. Require users to have a payment method on file. It's easy to fail a payment when you don't have a card to charge! ---- The bullets above are only part of the involuntary churn prevention picture. I go deeper on this topic in my latest newsletter post here: https://benlkatz.substack.com/p/deep-dive-how-to-prevent-involuntary?sd=pf If you enjoyed this deep dive on involuntary churn consider subscribing to my newsletter for free to get more deep dives on how to build strong businesses around products that users love. - Ben