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Retention

Involuntary churn

Customers lost because a payment failed rather than because they chose to leave. Usually the cheapest churn to recover.

Involuntary churn is a customer leaving without deciding to. A card expired, was reissued after a fraud alert, hit a limit, or a bank declined a renewal for a reason nobody at either company ever sees.

It is commonly 20% to 40% of all churn in a card-billed subscription business, and it is the only churn that is fixed with mechanism rather than persuasion: smart retries timed to the decline reason, a dunning sequence that reaches the person who can update the card, account updater services, and a grace period that does not switch off the product on day one.

If you do not separate it from voluntary churn, you will read a payments problem as a product problem and go and rebuild a feature that was never the reason.

Related terms

  • Dunning The automated sequence of retries and reminders that recovers a failed recurring payment before the subscription is lost.
  • Smart retries Scheduling payment retries based on the decline reason, the card type and local timing rather than at fixed intervals.
  • Account updater A card network service that supplies updated card details when a stored card is reissued, expired or replaced.
  • Churned MRR Recurring revenue lost from customers who cancelled outright in the period, whether they chose to leave or their payments stopped working.