We knew we were losing tens of thousands of dollars in potential revenue each month. We needed a trustworthy solution to optimize the signup subscription process

‍(Roie Shiloah | Head of Growth  Simply)

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Up to the 20th century, subscriptions were primarily limited to traditional industries like newspapers, magazines, and utilities. However, in the 21st century, subscription models have transformed, expanding into digital media, software, and physical goods, making customer retention and renewal rates critical for profitability. The subscription economy has grown significantly, with a global market size valued at $650 billion in 2020 and projected to reach $1.5 trillion by 2025. While subscription-based businesses represent a booming industry, they also face unique challenges, particularly maintaining strong renewal rates. When renewal rates drop, more customers leave the service, directly impacting the bottom line. (e2open.com, thestrategystory.com, statista.com) If you’re managing a subscription business, boosting retention by just 5% could potentially increase your profits by 25% to25% to 95%  . However, despite these stakes, many companies overlook the impact of churn and fail to calculate retention metrics—leading to unanticipated revenue losses. Knowing how renewal rates and churn affect growth and sustainability is crucial, yet many businesses are unaware of their true impact.

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How leading companies tackle customer churn

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To combat customer churn, successful companies use tailored strategies. Here’s how some well-known brands are keeping their customers engaged and loyal:

• Personalized customer engagement: Netflix enhances user experience by providing personalized recommendations, keeping customers engaged and loyal.
• Loyalty programs: Amazon Prime offers members benefits like free shipping, exclusive deals, and access to streaming services, fostering customer loyalty.
• Flexible subscription options: Spotify offers various subscription tiers, including family and student plans, allowing users to choose options that best fit their needs and budgets, thereby reducing churn.

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These approaches show how leading companies customize their strategies to reduce churn effectively. But while valuable, these methods often miss a critical factor: payment issues—a hidden but severe contributor to churn rates.

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Bounce Holistic: a proven solution for subscription renewals

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Bounce’s Holistic solution is designed to tackle one of the most pressing issues in subscription renewals— false credit card payment decline. By analyzing thousands of data points, Bounce’s ML algorithm identifies the reasons behind failed renewals, allowing businesses to recover up to 30% of transactions that would otherwise be lost due to card declines. This proactive approach will reduce churn by 15% and comes with a detailed dashboard that enables clients to observe and effectively address subscription payment issues.

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Simply, formerly known as JoyTune, is a global subscription service that faced a significant challenge: 20% of users who downloaded their Piano app and attempted to subscribe were declined due to payment issues. To address this, Simply partnered with Bounce, implementing a machine learning-powered solution to identify and recover incorrectly flagged sign-up subscribers. This collaboration resulted in a 5% increase in total sign-up revenues and a 2% growth in end-of-trial charges and renewals. Bounce’s subscription payment recovery services effectively reduced false declines, enhancing Simply’s customer acquisition and retention efforts. 

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Achieve better renewal rates and key metrics with payment recovery services

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With Bounce Holistic, your business can achieve significant improvements in renewal rates and key metrics without adding budget strain or operational complexity. Discover how you can enhance your revenue and stabilize your growth—book a demo today to see Bounce in action!

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We've all been there - gleefully clicking "Buy Now" on what seems like the best deal, whether it's booking that long-awaited flight, upgrading to the latest high-end smartphone, or ordering a customized New York Times front page puzzle, and suddenly: your card has been declined.This all-too-common issue, known as a card decline, occurs when a credit or debit card transaction is rejected during checkout. While it may seem like a minor inconvenience to the shopper, for businesses, card declines can signal significant trouble.

Research shows that over 10% of checkouts fail due to payment declines, significantly impacting e-commerce and subscription services, resulting in millions of dollars lost annually. Furthermore, the operational costs associated with managing declined transactions and providing customer support add another layer of expense. Businesses also grapple with higher customer acquisition costs (CAC) as they endeavor to re-engage lost customers, making card declines a pressing issue that requires attention.

For large online retailers, a single percentage point increase in decline rates can translate to tens of millions of dollars in lost sales annually. In 2023, U.S. eCommerce firms are projected to lose $157 billion due to false declines alone. Major players in the e-commerce space report that decline-related friction can significantly reduce customer lifetime value (CLV), with companies like Postmates experiencing a 1.72% uplift from implementing card account updater services, leading to $60 million in recovered revenue.

Resulting in substantial lost sales

When customers encounter declined transactions during online purchases, the experience often leads to significant frustration and impacts their future behavior and perception of the business. According to a study by the Baymard Institute, nearly 70% of online shopping carts are abandoned due to various issues, including credit card declines. Approximately 26% of shoppers who experience a payment issue, such as a card decline, end up purchasing the same product from a competitor.  Additionally, credit card debt surged to over $1 trillion in Q2 2023, reflecting increased transaction volumes but also a higher risk of declines and delinquencies. This issue not only leads to immediate revenue loss but also tarnishes brand perception, as frequent declines can make customers question a business’s reliability, potentially spreading negative reviews and eroding trust. Furthermore, the 2023 McKinsey Global Payments Report highlights that such experiences significantly decrease customer loyalty, with dissatisfied customers more likely to seek alternatives, thereby increasing churn rates and reducing customer lifetime value.

Strategies to mitigate card declines

Effectively managing card declines is crucial for maintaining revenue and customer satisfaction. Here are advanced strategies to reduce declines and improve transaction success rates:

• Enhanced Fraud Prevention and Security Layers: Implement robust fraud prevention tools and add multiple security layers, such as 3D Secure (3DS2), which uses security questions or biometric authentication. This reduces fraudulent transactions and minimizes false declines, improving authorization rates by up to 10%.

• Accepting Digital Wallets: Digital wallets like Apple Pay and Google Pay use tokenization and two-factor authentication, reducing fraud risk and improving authorization rates. They expedite the checkout process, enhancing customer satisfaction.

• Accurate Industry Indicators and Customer Information Ensure all transaction data matches business activities and customer details. Using accurate Merchant Category Codes (MCCs) and complete billing information, including ZIP codes and CVCs, strengthens authentication and reduces declines due to mismatched information.

How to tackle credit card declines with Bounce’s solution

At Bounce, we are committed to excellence with our advanced AI that recovers failed payments in real-time, requires minimal resources, and operates on a commission basis, ensuring businesses only pay for successful recoveries. Our solution includes:

• AI-Based Payment Recovery: Our system analyzes transaction data in real-time to recover failed payments, boasting a recovery rate of over 30% for declined transactions.
• Real-Time Transaction Analysis: Continuous monitoring of transaction patterns allows us to quickly identify and address issues that might lead to declines.
• Seamless Integration: Our technology integrates smoothly with existing payment systems, requiring no additional budget or extra work after implementation.

And contributes to these KPIs:

• Increases top line by 5%: By recovering a substantial portion of failed transactions, we help businesses boost their overall revenue.
• Improves Authentication Rates by 7%: Enhanced fraud detection and verification processes improve the success rate of legitimate transactions.
• Reduces Customer Acquisition Cost (CAC): Efficiently managing declines helps retain customers and reduces the need for costly reacquisition efforts.

Incorporating innovative tools like ours transforms this challenge into an opportunity. With industry-leading AI-driven payment recovery and real-time transaction analysis, we don’t just mitigate the impact of card declines; we revolutionize the entire checkout experience. By integrating such sophisticated technology, businesses can optimize revenue streams and enhance customer experience and retention, knowing they are less likely to be declined for no good reason, ultimately positioning themselves as leaders in the marketplace.

"There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know."

(Donald Rumsfeld, the former U.S. Secretary of Defense)

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E-commerce is bleeding billions due to cart abandonment, posing a daunting challenge within the e-commerce ecosystem, with an abandonment rate of 70.19% (according to the Baymard Institute). Businesses lose $18 billion yearly from unfinished transactions alone. Certain industries are more severely impacted: 

• The travel sector, including cruise and ferry websites, faces the highest rates with up to 98% of carts being abandoned
•  The fashion industry experiences rates of approximately 87.79%, 
•  The mobile providers and airline industries contend with abandonment rates of 90%. 

Despite the prevalence of cart abandonment, awareness among stakeholders and e-tailers varies. Reports indicate that 74% of e-commerce managers recognize cart abandonment as a critical issue, yet only 40% actively track and analyze this data to understand its financial impact. Here's the kicker: Instead of relying on remarketing strategies, businesses should focus on addressing the psychological, UI, and especially money transfer issues that lead to abandoned carts in online shopping.

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Combating buyer's fatigue

Cart abandonment often boils down to decision fatigue; when shoppers are bombarded with too many choices, their mental bandwidth gets maxed out, leading to exhaustion and cart abandonment before purchase completion, which is why many strategies now focus on simplification:

• Simplify choices: Reduce the number of product options and streamline the decision-making process. Apple, for example, simplified its product lineup, boosting sales.
• Provide clear and full information: Ensure that product descriptions are clear and concise, providing all necessary information to make an informed decision without needing to browse through multiple pages. Amazon’s product pages exemplify this approach by highlighting key details and comparisons.
• Optimize navigation: Design an intuitive and straightforward navigation system to minimize the effort required to find and select products. Think about how easy it is to work with Google’s clean and user-friendly interface.

Easier checkout processes

A complicated checkout process significantly deters customers from completing purchases. Here's how you can simplify it: Streamline steps: Reduce the number of required fields and steps to complete a purchases; Guest checkout: Let customers checkout without creating an account ;Multiple payment options: Offer various payment gateways and ensure the site is mobile-optimized.

Payment decline and cart abandonment

However, there is the elephant in the room. Customers get really irritated when they encounter incorrect prices or face payment declines at checkout. This doesn’t just lead to cart abandonment; it also destroys the trust and credibility of the e-commerce site. For example, 42% of consumers will abandon their cart if their payment is declined due to suspected fraud. Studies show that customers are more likely to get upset and switch to a competitor after facing a payment decline. This perfect storm of lost sales and damaged reputation screams for exact pricing and a frictionless payment process.

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Revolutionizing revenue recovery with Bounce

Bounce identifies and approves false card declines, converting them into successful transactions using advanced machine learning algorithms. This approach not only recovers lost revenue but also enhances customer satisfaction by ensuring legitimate transactions are not mistakenly rejected. Bounce's ML algorithm works seamlessly in real-time to approve valid transactions, ensuring legitimate sales are not lost and a smooth user experience. This immediate, yet seamless, intervention helps:

• Increase top line revenue: Recover over 30% of falsely declined transactions, which adds 5% to your top-line revenue.
• Improve KPIs: Enhance key performance indicators (KPIs) such as conversion rates and customer satisfaction by reducing false card declines.
• Enhance customer trust: Provide a smoother, user friendly checkout experience, reducing frustration and improving satisfaction.

Compared to retargeting

Bounce’s solution tackles the root cause of lost sales, proving to be more cost-effective than retargeting campaigns. Retargeting can hike conversion rates by up to 128%, but it comes with extra marketing costs. Preventing false card declines directly recovers sales without additional ad spend, offering a higher ROI.

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Don’t let potential sales slip through the cracks

Ready to claw back your lost revenue from false declines? Schedule a demo with Bounce to see how our revolutionary solution can turn hidden losses into wins. Don’t let potential sales slip through the cracks—let Bounce elevate your conversion rate and customer satisfaction. For more information, visit Bounce.

ABBA's "Take a Chance on Me" might not have been about the internet and free trials, but the sentiment fits perfectly: In today’s subscription economy, offering something for free to earn loyalty and commitment is spot-on. In fiercely competitive subscription markets and ecosystems, turning free trial users into paying customers is the difference between a win and a loss.

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7 Winning strategies for making your free-trial users into paying customers

1. Streamline the user journey :To avoid user abandonment, it’s crucial to remove friction from your onboarding process. Tools such as FullStory and Hotjar offer detailed analytics and session recordings to help you pinpoint where users encounter difficulties. 

2. Personalize the experience: Customizing the onboarding process to meet specific user needs can significantly boost conversion rates. For example, Spotify personalizes its user experience by leveraging user data to tailor the onboarding process. When users sign up for a free trial, Spotify analyzes their listening habits and preferences to suggest playlists and songs they are likely to enjoy. This approach makes the trial experience more engaging and increases the likelihood of conversion paid subscription.

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3. Accommodate various learning styles:  Provide varied onboarding methods - such as guided tours, checklists, and live workshops - to accommodate different learning styles. Interactive tutorials and personalized guidance can make the onboarding process more engaging and informative.Canva and Notion provide personalized onboarding tutorials during their free trials. 

4. Utilize the Zeigarnik Effect:To boost free trial conversions, leverage the Zeigarnik effect. This psychological principle suggests that people have a strong desire to complete tasks they've started. By using 2-step opt-in forms, you can effectively harness this effect. For instance, OptinMonster's prompts users to click a link to open a signup form, increasing the likelihood they’ll complete the action by entering their email. Hubstaff successfully applied this technique, increasing free trial signups by 21% by engaging abandoning visitors with a well-timed popup.

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5. Implement behavior-based emails: Dispatch activity-triggered emails to steer users through essential actions. Emphasizing unused features and upgrade benefits keeps users engaged and promotes conversions.

6. Contextualize Upgrade Prompts :Clearly demonstrate how your product addresses specific user problems, making the upgrade decision more compelling. For example, emphasize how a project management tool streamlines workflows and saves time. This contextualization helps users see the tangible benefits of upgrading to a paid plan. For instance, Asana illustrates how their tool can enhance team productivity and project management efficiency.

7.Request payment information upfront: While requesting payment information upfront may reduce the number of free trials, it filters out non-serious users and increases conversion rates. In the subscription ecosystem, it’s often better to have fewer subscribers who are genuinely interested in your product or service. This strategy is commonly used in SaaS models where the conversion rates for opt-out trials, which require payment information upfront, can be as high as 60%, compared to lower rates for opt-in trials.

The credit card decline dilemma

Even with effective strategies, credit card declines remain a significant hurdle, causing involuntary churn and eroding revenue. The actual moment of conversion, often referred to as the "blind zone," is critical. When this zone is not addressed, potential revenue is lost. Common causes include expired cards, fraud holds, insufficient funds and hard declines. Monitoring and addressing these issues can enhance revenue and customer satisfaction. These issues impact not only revenue but also customer experience and operational efficiency.

Stop leaving money at the table

In today's subscription economy, smooth onboarding is key. But what if perfectly valid subscribers are getting flagged at checkout, leading to lost revenue and frustrated customers?

Bounce solves this problem with the power of AI. Our machine learning technology analyzes payment data to identify valid transactions wrongly declined. This means:

• An Access to Bounce’s New Tailored Product Swift: Swift is a machine learning solution focused on converting more customers after a free trial. It helps identify users with high intent and ability to pay without charging their cards, ensuring a seamless onboarding experience. Swift operates on two levels: conversion level, predicting chances of becoming paying customers, and action level, suggesting the best actions to turn low-chance users into paying customers. This enhances user experience, accuracy in user acquisition, revenue generation, and understanding of customer lifetime value (LTV).
• More Subscribers, More Revenue: We recover up to 20% of lost free trial conversions, translating to a 5% boost in top-line revenue.
• Reduced Customer Churn: Bounce ensures a seamless checkout experience, reducing frustration and leading to a 15% decrease in churn. Happy customers stick around longer, boosting your lifetime value (LTV).
• Frictionless Signups: Our AI ensures a smooth payment flow, preventing unnecessary friction and keeping customers happy.

• Recover Lost Revenue: We identify and approve valid subscribers flagged at checkout, recovering up to 10% of failed signups.
• Boost Conversion Rates: Bounce helps convert more free trials into paying customers, leading to a 4% increase in top-line revenue.
• Improve Customer Satisfaction: A smooth checkout experience keeps customers happy and reduces churn.

You don't have to take our word for it; we can show you. Schedule a meeting with our experts and see how we can improve your conversion performance.

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