The average customer lifetime value (ACLV) is a key measure of profits for businesses offering online subscriptions or on-demand delivery of services. SaaS providers, cloud computing, online entertainment, games, virtual goods, internet services, are among companies that take advantage of recurring billing to extend ACLV.
All types of payment methods can be set up for automatic billing, including echecks, debit, and credit cards. Recurring payments stabilize monthly cash flow. Once a customer is placed on a recurring billing plan, revenues continue to flow unless the customer cancels or a transaction is not completed.
Providing your customers superior customer service goes a long way in extending ACLV. And automating of recurring billing and payment functions goes a long way in protecting cash flow.
During each recurring billing cycle, up to 18% of transactions are declined. Transactions fair for many reasons. Card dates expire, cards are reissued, or buyers are over credit limits. Regardless of reason, up to 25% of cards are reissued each year.
Echeck transactions also fail. Echeck transactions generally bounce only when an account is temporarily low on funds, resulting in a “bounced” or returned item. Accounts using echecks or direct debits from bank accounts have higher ACLV because people rarely change bank accounts
The quickest way to transform declined card transactions to approved items is to use an Automated Updater Service. This service is available only for high volume accounts and requires a direct plug in to the processor.
When a card transaction is declined, account updater automatically checks the card issuing bank to get updated information on a card. Up to 80% of the transactions are then approved because many declines are for easy-to-fix issues like expired dates.
Recapture declined echeck sales by automatically resubmitting the returned item. Most of the time, consumers do not mean to bounce a check; they simply have miscalculated how much money is in the bank.
All departments must work together to extend the lifetime value of customers. The ability to automate paying processing functions increases productivity, decreases expense and keeps customers on the books.
Automated account updating eliminates the need to contact the customer and risk an unnecessary cancellation or interruption of service. Keeping the customer happy is the ultimate secret of extending ACLV.
Do you want to squeeze more money from your recurring payments?
Contact email@example.com today.