Win back failed transactions and increase customer lifetime value
It is a fact of life that some merchants will experience failed direct debit transactions. Despite being a rare occurrence, failed transactions can have an effect on revenue, especially within the context of a recurring payment model.
Failed direct debit transactions are not necessarily a sign of a bad customer, or that the merchant is doing something wrong, and luckily with SlimPay’s Automated Retry Logic certain types of failed transactions can be effortlessly and automatically recovered, thus increasing the merchant’s transaction success rate and keeping customers on track for future payments.
As payment is an essential step in the customer journey, it is crucial for merchants to resolve payment issues in an efficient and painless manor for both the customer and the business.
Improving recovery in the online domestic appliance rental Industry
In order to quantitatively measure the decrease in failed transactions due to Automated Retry Logic, SlimPay conducted an in-depth analysis on one of its merchant’s transaction data.
The client is specialised in home rental services, which have a price tag of up to 500€ and are typically rented for a long duration. As our clients business is based on a recurring payments model, this kind of situation could have a negative impact on their revenue if not efficiently managed.
How does it work?
1. ALERT VIA SMS / EMAIL
SlimPay enables merchants to send reminders via SMS or email to pre-notify consumers of a retry attempt.
2. RETRY VIA SDD
SlimPay is able repeatedly retry to recover a failed transaction. The merchant can decide if they wish to notify the customer of the retry attempts or not.
3. RECOVERY BY OTHER PAYMENT MEANS
In the case of failure following retry attempts, SlimPay offers the merchant the possibility of recovering the failed payment via bankcard. All subsequent transactions after recovery will be paid via direct debit.
Results and conclusion
The results show that over a period of 12 months, 10% of transactions were rejected. 6,5% of the rejected transactions were eligible for retry using SDD. The success rate for the first retry by SDD was 20%, equating to a 2% increase in the conversion rate. 3% of the rejected transactions were eligible for retry using a bankcard, which had a success rate of 50%, equaling to a 1,5% increase in successful transactions. Thus, in total a 5,5% increase in conversion was achieved through Smart Retry, which equates to a 35% net decrease in the R-Transaction rate.
Using SlimPay’s Automated Retry Logic enables merchants to effortlessly reduce their number of failed transactions through an automatic recovery process, meaning an increase in both recurring revenue and customer lifetime value!
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For more information on how Automated Retry Logic could benefit your subscription business, please do not hesitate to get in touch!