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Maintaining a positive customer experience, even in the face of payment failures.

Subscription customers are a core part of subspace's business. They have a committed relationship with subspace and pay for regular delivery of products or services. This creates a very different experience and a greater perceived value from the infrequent, single purchase transactional relationships other business types have with their customers. For this reason, subspace must be customer-obsessed – the success of their customer relationships depends on it.

Unfortunately, many subscription companies don’t understand that the payment experience is a critical part of the customer relationship and a key driver of satisfaction and retention. Subscribers expect great overall experiences and they expect their card payments to work the first time. This means that how subspace recovers failed payments is extremely important. Their goal should be to resolve the payment without any customer involvement when possible and to create a positive experience when customer engagement is unavoidable.

The ideal payment experience

The ideal payment experience for subspace customers is completely seamless. Customers make their payment and receive the products and services from their subscription without any interruptions.

However, a poor subspace payment experience is created when card payment requests are declined. Not surprisingly, card decline events often lead directly to customer churn. Unfortunately, the payments system itself often creates friction in the subspace subscription payments process, usually through no fault of the customer or the business. This friction takes the form of failed payments, which are decline decisions on customer cards. Decline decisions can occur in any billing period of the relationship, whether it's the first payment or the twelfth.

Decline decisions often happen because banks score recurring subscription payments as a risky transaction with an increased chance of fraud. False declines occur when banks score transactions from legitimate cards and customers as fraudulent, which occurs as high as 24% of the time for recurring payment submissions.

Soft Declines vs Hard Declines

In addition to false declines, there are two other types of card declines:

1. Soft Declines

Soft declines are failed payments that can usually be resolved by interacting directly with the payments system. Examples of soft declines include:Insufficient fundsDo not honor instructionsCredit limit exceededFalse declines

Whenever possible, subspace tries to resolve soft declines without involving the customer. This is because contacting the customer can cause frustration and increase the risk of churn.

2. Hard Declines

Hard declines are failed payments that require customer engagement to solve because the card cannot be billed. Examples of hard declines include:Lost or stolen credit cardsExpired cardsInvalid card numbers

To resolve hard declines, subspace must contact the customer to collect new card information. Subspace does this in a way that is designed to create a positive customer experience.

Subspace's goal is to resolve all failed payments without any customer involvement when possible. However, when customer engagement is unavoidable, subspace strives to create a positive experience.

The Problem with the Legacy Subscription Payments Stack

The legacy subscription payments stack that most companies use today is not able to recover failed payments or avoid the poor customer experiences and lost customers that these failed payments cause. Some more sophisticated companies have created their own internal retry systems or customer collection processes to deal with failed payments, but these solutions are often ineffective and fail to deliver a great customer experience.

Subspace is a new type of subscription payments platform that is designed to solve the problem of failed payments. Subspace uses a modern payments tech stack that expands upon the legacy architecture of the billing/CRM system and payments gateway.

Subspace is able to recover failed payments and avoid poor customer experiences by:

Identifying the root cause of failed payments. Subspace can identify whether a failed payment was caused by a problem with the customer's card, the payments system, or the merchant's own subscription management system.
Using a variety of payment recovery methods. Subspace uses a variety of payment recovery methods to resolve failed payments without any customer involvement. These methods include automatic retries, intelligent routing, and payment plans.
Providing a seamless customer experience. Subspace provides a seamless customer experience for failed payments. Customers are only contacted if absolutely necessary, and subspace provides clear and concise instructions on how to resolve the issue.

By solving the problem of failed payments, Subspace can help companies reduce churn and increase customer satisfaction.

Subspace Payment Recovery Best Practices

Subspace recommends the following best practices for recovering failed payments:

Start with invisible solutions. Subspace uses a variety of invisible payment recovery methods, such as automatic retries and intelligent routing, to resolve failed payments without any customer involvement. This helps to create a seamless customer experience and reduce the risk of churn.
Only contact customers when necessary. Subspace only contacts customers if absolutely necessary, such as when a hard decline occurs. When subspace does contact a customer, they do so in a personalized and collaborative way.
Use a personalized customer outreach strategy. Subspace uses a personalized customer outreach strategy that is tailored to the communication preferences of each individual customer. Messages are sent at an ideal time to ensure the best response rate, and they use a tone of voice that is appealing to the customer.
Offer options and avoid confrontation. Subspace offers customers a variety of options for resolving failed payments, such as updating their card information or creating a payment plan. Subspace avoids confronting customers aggressively or treating them like a credit problem.

Subspace believes that payment recovery should be an opportunity to build a stronger customer relationship and develop deeper trust. By following the best practices above, subspace can help companies reduce churn and increase customer satisfaction.

How Subspace Delivers a Great Customer Experience

Subscription businesses like Subspace should put as much thought and care into their failed payment recovery process as they do in delivering a great product or service. The first step is to use recovery techniques that avoid any customer awareness of the failed payment in order to minimize churn and improve retention. When the customer must be involved, Subspace reaches out to them in an empathetic and understanding way, encouraging collaboration and motivating them to update their information so their payment can be processed. These techniques help Subspace ensure that they always deliver a great customer experience, even when a payment fails.

Here are some specific ways that Subspace delivers a great customer experience when recovering failed payments:

Subspace uses a variety of invisible payment recovery methods. This means that customers are often unaware that their payment failed in the first place. Subspace can automatically retry failed payments, intelligently route payments between different payment processors, and offer payment plans.
Subspace only contacts customers when necessary. Subspace will only contact customers if they need to update their card information or if there is another issue that requires customer involvement.
Subspace uses a personalized customer outreach strategy. Subspace tailors its customer outreach messages to the individual customer, taking into account their communication preferences and the specific reason for the failed payment.
Subspace offers customers a variety of options and avoids confrontation. Subspace gives customers options for resolving failed payments, such as updating their card information, creating a payment plan, or pausing their subscription. Subspace avoids confronting customers aggressively or treating them like a credit problem.

By following these best practices, Subspace is able to deliver a great customer experience even when a payment fails. This helps Subspace to reduce churn and increase customer satisfaction.

Providing an Excellent Customer Experience – Even When a Payment Failed