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In 2018, Vindicia commissioned Forrester Consulting to conduct a study entitled The Total Economic Impact™ of Vindicia Select that examined the potential return on investment that enterprises may realize by deploying Vindicia Select. This post highlights the key findings.
Subscription-based businesses make significant investments in acquiring new customers. When successful, organizations will typically recoup these expenses over the total lifetime of the customer relationship. However, even when customers are satisfied with the subscription product or service, unexpected payment failures can result in interruptions to the recurring relationship. This involuntary churn can make it difficult to grow or even sustain a business.
Credit or debit card transactions can fail for a number of reasons, ranging from insufficient funds, to issuing of new cards, to suspicion of fraud. Most subscription service providers have procedures in place to deal with failed payments. Typically, billing and payments operations teams, which are tasked with optimizing payment success rates, employ a combination of retry algorithms and account updater services alongside customer outreach to recover billing relationships after a payment failure occurs. However, even with sophisticated procedures in place, companies lose revenues and customers are disconnected because of non-payment as a result of failed transactions.
Vindicia Select a cloud-based recurring-payments solution that leverages artificial intelligence, sophisticated retry algorithms, and large data sets to reduce involuntary churn. Select leverages patented techniques to enable transactions that failed repeatedly with regular recovery processes, to complete successfully. The purpose of the study was to provide readers with a framework to evaluate the potential financial impact of using Vindicia Select on their organizations, both in terms of the immediate revenue rescued, as well as the additional revenue generated as these customers continue to subscribe to the service.
Forrester interviewed payments executives at five companies that use Vindicia Select. The interviewed companies spanned multiple industries, including services, media, and physical goods. The Forrester study then analyzed a composite $1 billion organization. They determined that over a three-year period, the composite company would experience the following results:
Forrester interviewed payments executives at five companies that use Vindicia Select to manage their involuntary churn:
Prior to deploying Vindicia Select, each organization had in place a variety of practices designed to limit failed payments. To reduce the likelihood of failed transactions, they leveraged account updater services as well as customer outreach via various channels. Once transactions did fail, they employed retry algorithms to recover billing relationships. Still, they were left with a significant number of terminally failed transactions.
The following challenges served as key drivers in the companies’ decisions to invest in Vindicia Select:
The interviews revealed these key benefits from Select:
The study identifies the following prime benefits of Vindicia Select:
To learn more, join our live webinar featuring Forrester Consultant Joe Branca on February 7, 2019 at 11:00 am PST.