Payment Failures: The Hidden Gem of SaaS Retention
Typically, businesses work towards decreasing cancellations when considering client retention. The majority of credit cards expire after three years, and anyone might have payment difficulties. 20% to 40% of lost clients are the result of failed payments. Therefore, making a small effort in this area might greatly increase your client retention.
Every stage of your client retention campaign should be handled the same as your previous retention initiatives. Keep in mind that this is a sort of marketing and that tactical, tailored messaging is more effective than general efforts. It's important to maintain a client, not merely update their card information. Keeping your current clients is considerably more dependable and beneficial for your business than acquiring and onboarding new ones. Let's examine the three aforementioned aspects and outline what you can do at each stage.
There are three ways to approach payment failures. These include:
Pre-failure - the 30-day period prior to the expiration of the credit card.
The grace period - the one to two weeks following the expiration of the card.
Post-failure - the time following the grace period
PRE-FAILURE
In the context of SaaS (Software-as-a-Service) retention, pre-failure refers to the early warning indications or indicators that a customer is at danger of churning or terminating their membership to a SaaS product. Early detection of these red flags can assist SaaS providers in taking proactive steps to resolve the underlying problems and reduce client churn.
• Reduced usage or engagement: If a customer's usage or engagement with a SaaS product gradually declines, it may indicate that they are growing disinterested or finding the product less valuable.
• Lack of adoption: Customers are less likely to renew their subscriptions if they don't fully utilise the product or all of its important features.
• Slow or no reaction to outreach: A client's slow or nonexistent response to customer service outreach efforts, such as emails or phone calls, may indicate disengagement or dissatisfaction.
SaaS firms may increase their client retention rates and guarantee long-term success by keeping an eye on these pre-failure symptoms and taking proactive steps to rectify them.
Solutions with Transact Bridge to Avoid payment failure
Transact Bridge offers businesses a selection of options to prevent payment failure and guarantee the speedy, safe processing of online payments. Businesses may increase customer retention rates and create a devoted clientele by putting these suggestions into practice:
• Payment Solutions: we offer optimised payment processing for widely used Indian payment options. We assist companies in processing payments using a variety of payment options, including UPI, credit/debit cards, net banking, and mobile wallets, We help you take recurring payments through cards, UPI, and e-mandates as well.
• Payment retries: Transact Bridge enables organisations to automatically retry unsuccessful payments at certain intervals. This can aid in payment recovery and lessen the effect on client retention.
• Automated payment reminders: Transact Bridge notifies clients of impending payments through email and SMS to ensure that they are aware of them and to lower the likelihood that they will be missed.
• Payment routing: Transact Bridge enables companies to direct payments to various payment processors according to the success rates of those processors. This reduces the chance of a failed payment by guaranteeing that payments are handled by the most dependable payment processors.
• Real-time payment activity monitoring: Transact Bridge offers real-time monitoring of payment activity, enabling organisations to swiftly detect and address any potential problems. By doing this, payment failure may be avoided and its negative effects on client retention are reduced.
FAILURE AND THE GRACE PERIOD
The grace period is usually a time frame during which the client is not paid for the service, enabling them to keep using it while the business attempts to address any concerns. The grace period's duration might vary, but it is often sufficient to provide the business time to address the problem and guarantee that the consumer is happy with the service.
Since there are various factors that contribute to payments failing, a little sympathy here goes a long way. To avoid offending your customers, don't point the finger at them for the card's issues. Aside from that, watch out for overtly dictatorial rhetoric. Remember to be human while you communicate with them, and talk to them the same way you would if they were your buddy. Encourage them to utilise a new payment method, for example, or get in touch with their bank to find out why the transaction was rejected. As you continue along and their grace period gets shorter, you can use stronger language, but especially in the beginning, use kind yet convincing language.
POST-FAILURE
When it comes to SaaS retention, post-failure refers to the steps a client takes after an issue or failure with their SaaS product or service. These steps are used to retain the client and gain their trust in the business and its offerings Communicating directly and openly with the customer is an important post-failure action. Businesses should be transparent and clear about what went wrong, the efforts being made to fix it and the expected resolution date. It helps in controlling the expectations of the customers and reducing their annoyance.
Overall, post-failure measures are essential for SaaS retention since they show a company's dedication to customer happiness and can assist to restore a customer's confidence and loyalty after an issue or failure with the service.
CONCLUSION
Companies should have a straightforward billing procedure that is simple for clients to grasp in order to prevent unsuccessful payments. To make it simple for clients to pay, they should provide a variety of payment methods, including bank transfers and credit cards.
The proactive monitoring of payment activities and prompt resolution of any issues that surface are crucial components of preventing unsuccessful payments. Through early detection of possible payment issues, their negative effects on client retention may be reduced Overall, SaaS retention depends on avoiding declined transactions. Businesses may boost client happiness, lower churn, and cultivate a devoted clientele for their SaaS product or service by offering a smooth and dependable billing experience.
