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3 Solutions to Revenue Recovery
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Revenue Recovery is a big deal to small businesses.
The truth is, not all companies have revenue recovery teams. Honestly, most entrepreneurs and business owners don’t even think about revenue recovery, much less creating a team to manage it. Our team discovered we needed a solution to this problem in 2015. Our previous company was a three-time Inc. 5000 company, we were Infusionsoft Ultimate Marketers of the Year, and we had built a brand that we were all proud of. But we had a problem.
Most of our revenue came from subscriptions, memberships, and payment plans. As a result, we had TONS of failed payments every month! A credit card expired, billing information was incorrect, etc. We were spending so much time, effort, and money acquiring these customers only to lose them on the back end of the business. Every month we were seeing money go right out the back door, and it didn’t take long for that to become a 6-digit number! We had to have a solution. We found 3 solutions.
Revenue Recovery Solution #1: Automation
We thought we could solve the problem with automation alone. So we found software designed to handle this problem and implemented it right away. (Infusionsoft, Churn Buster) The result? An improvement, but marginal at best. We were only recovering about 10-15% of our failed payments. Yes the software worked great at generating emails and fixing basic credit card errors, but that only made up a very small percentage of our lost revenue. What about the other 85%? We realized that software can’t care. We needed a more human approach.
Revenue Recovery Solution #2: Automation, Plus Crappy Delegation
Recovering 15% of our 6-digit number was just not good enough. Our company was serving customers not credit cards, and we simply needed to have a real, live, actual human reaching out to our customers to help them with their failed payments. So, along with our software, we delegated the task of revenue recovery to someone on staff who already had plenty of work to do. I admit, it wasn’t our greatest moment of leadership, we simply walked into someone’s office one day and handed them this giant task without giving much thought to the full scale of what it was that we were asking. We call this crappy delegation. And when you use crappy delegation you usually get crappy results. It didn’t take long to see that no one on our staff really had the time to tackle this monster of revenue recovery. As long as we used this split-focus approach, where revenue recovery was just another bullet point far down the list on someone’s job description, we were not going to recover much more than 15% our failed payments. And while this was an improvement from 0%, we were beginning to see that this was a big issue for our business and it was significantly impacting our bottom line. It was time to get serious.
Revenue Recovery Solution #3: Full-Time Focus
Our 6-digit failed payment number was still way too large for my liking. Again, we had spent so much time and money on marketing and measuring new customer acquisition on the front end of our business, but we were doing almost nothing on the back end to make sure we extended the lifetime value of our customers. We had to get serious about this, so we hired a full time TEAM of people to handle this problem. This was an expensive solution to the problem, I admit, but we knew if they could dramatically improve our failed payment recovery rate, it be well worth the investment. And it was truly money well spent. Our customer engagement went through the roof. The automated emails that we were sending out had an 85% failure rate. Nobody read them! But we were legitimately shocked to see how effective a group of caring, kind, and respectful people could be. Our revenue recovery team, was handling all kinds of issues that software could never anticipate or solve. We began to develop scripts, approaches, systems, and processes that would help us to recover 80% of our failed payments! 80%! We had found the secret sauce to revenue recovery, and we could not have been more pleased with that team or the results they had achieved.
Things covered in this video:
3 solutions to revenue recovery
how to use automation to fix revenue recovery
how to use a full time focus to fix revenue recovery
The truth is, not all companies have revenue recovery teams. Honestly, most entrepreneurs and business owners don’t even think about revenue recovery, much less creating a team to manage it. Our team discovered we needed a solution to this problem in 2015. Our previous company was a three-time Inc. 5000 company, we were Infusionsoft Ultimate Marketers of the Year, and we had built a brand that we were all proud of. But we had a problem.
Most of our revenue came from subscriptions, memberships, and payment plans. As a result, we had TONS of failed payments every month! A credit card expired, billing information was incorrect, etc. We were spending so much time, effort, and money acquiring these customers only to lose them on the back end of the business. Every month we were seeing money go right out the back door, and it didn’t take long for that to become a 6-digit number! We had to have a solution. We found 3 solutions.
Revenue Recovery Solution #1: Automation
We thought we could solve the problem with automation alone. So we found software designed to handle this problem and implemented it right away. (Infusionsoft, Churn Buster) The result? An improvement, but marginal at best. We were only recovering about 10-15% of our failed payments. Yes the software worked great at generating emails and fixing basic credit card errors, but that only made up a very small percentage of our lost revenue. What about the other 85%? We realized that software can’t care. We needed a more human approach.
Revenue Recovery Solution #2: Automation, Plus Crappy Delegation
Recovering 15% of our 6-digit number was just not good enough. Our company was serving customers not credit cards, and we simply needed to have a real, live, actual human reaching out to our customers to help them with their failed payments. So, along with our software, we delegated the task of revenue recovery to someone on staff who already had plenty of work to do. I admit, it wasn’t our greatest moment of leadership, we simply walked into someone’s office one day and handed them this giant task without giving much thought to the full scale of what it was that we were asking. We call this crappy delegation. And when you use crappy delegation you usually get crappy results. It didn’t take long to see that no one on our staff really had the time to tackle this monster of revenue recovery. As long as we used this split-focus approach, where revenue recovery was just another bullet point far down the list on someone’s job description, we were not going to recover much more than 15% our failed payments. And while this was an improvement from 0%, we were beginning to see that this was a big issue for our business and it was significantly impacting our bottom line. It was time to get serious.
Revenue Recovery Solution #3: Full-Time Focus
Our 6-digit failed payment number was still way too large for my liking. Again, we had spent so much time and money on marketing and measuring new customer acquisition on the front end of our business, but we were doing almost nothing on the back end to make sure we extended the lifetime value of our customers. We had to get serious about this, so we hired a full time TEAM of people to handle this problem. This was an expensive solution to the problem, I admit, but we knew if they could dramatically improve our failed payment recovery rate, it be well worth the investment. And it was truly money well spent. Our customer engagement went through the roof. The automated emails that we were sending out had an 85% failure rate. Nobody read them! But we were legitimately shocked to see how effective a group of caring, kind, and respectful people could be. Our revenue recovery team, was handling all kinds of issues that software could never anticipate or solve. We began to develop scripts, approaches, systems, and processes that would help us to recover 80% of our failed payments! 80%! We had found the secret sauce to revenue recovery, and we could not have been more pleased with that team or the results they had achieved.
Things covered in this video:
3 solutions to revenue recovery
how to use automation to fix revenue recovery
how to use a full time focus to fix revenue recovery
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