Introducing Success+: predict and manage failed payments with recurring payment intelligence
By Duncan BarriganApr 20204 min read
Success+ uses recurring payment intelligence to schedule payment retries on the optimal day for each customer.
Today at GoCardless, we’re excited to be launching our newest product, Success+.
Success+ automatically optimizes your failed payment retries, using recurring payment intelligence to schedule retries on the optimal day for each customer. Success+ helps businesses to efficiently recover, on average, 76% of payments that initially fail* - making your collections more customer-centric, reducing the admin burden of chasing failed payments, and increasing your overall revenue.
And this is just the beginning for Success+. It's also the first in a series of new products from GoCardless that will help you tackle some of the biggest challenges facing your business.
Why payments can transform your business
When we run customer surveys, we often ask users what they would most like to see us change about GoCardless. Most people have consistently answered this question with “nothing, it’s great!”. But when we actually talked to them, it turned out they particularly hated dealing with failed payments and chargebacks, and they would love to get paid even faster.
So what’s going on? Most customers thought GoCardless was a great way to collect ACH debit (also referred to as bank debit). If they had problems with ACH debit itself, most didn’t blame us.
We’ve never thought of ourselves as an ACH or bank Debit company. Our mission is to take the pain out of getting paid, so for us it’s just a tool - GoCardless should be much better than ACH Debit. We want people to blame us for the problems with how payments work today, even when we didn’t cause them.
The real pain of failed payments
One thing that everyone does know is that payment failures are a problem. Across all payment mechanisms, around 15% of transactions fail. What you might not realize is that failed payments don’t just create admin - they hurt businesses in more seriously damaging ways.
The customer journeys you create almost always involve payment collections, and a payment failure marks the fork in the road where an “unhappy path” begins.
When you’re collecting money you’re already owed, failed payments lead to bad debt. This is usually a far bigger problem than payment collection costs. For example, some publicly listed utilities experience the equivalent of as much as 5% of their revenue in bad debt alone.
For subscription businesses, failed payments lead to involuntary churn, where an otherwise happy customer can’t make a payment and loses access to your service. It’s estimated that 30% of a subscription business’s churn is involuntary. Even your most loyal customers aren’t immune from failed payments.
Many businesses pour resources into tackling bad debt and churn, but treat payment failures as inevitable - ignoring the impact of tackling the very first step in the journey.
But payment failures are optional. Success+ helps you get closer to eliminating failed payments, all without spiraling admin costs or poor customer experiences.
The secret of Success+: recurring payment intelligence
Some businesses manually retry failed payments, while others ask the payer when they can make the payment or offer the ability to pay in installments, for example. Our objective with Success+ is to automate away all these high-effort ways of avoiding failed payments.
Every situation is different, so for this to work it’s important to be able to configure the automation - this is why you can choose how many times and how often to retry each payment with Success+.
The real secret of Success+ is that we don’t stop there. Rather than just automating the retries, Success+ picks the optimal day to collect that payment. It uses recurring payment intelligence, powered by machine learning models, to select the highest chance of collecting a payment from each customer.
There’s a great deal of potential in combining automation and configuration with payment intelligence. Say you want to help struggling customers by offering to postpone the due date of instalments, without delaying payments from those able to pay, payment intelligence opens the door to making that possible.
Recurring payment intelligence will be the key to an unbeatable combination of low failures and the best customer experience.
The benefits of Success+
The results from our large-scale beta test of Success+ speak for themselves. Of all failed payments intelligently retried using Success+, 76% were successfully collected. This is an overall failure-rate reduction of 15% (compared to retrying payments two times as soon as possible).
It’s also worth remembering that businesses using GoCardless already have payment success rates of ~97.5% (for cards, this is around 85-90%) even before using Success+.
Whether your business struggles with high failure rates or not, you have a lot to gain from setting up a payment retry schedule using Success+.
As I mentioned, every failed payment comes with an associated cost. In addition to the lost revenue, there’s the admin cost of chasing each payment. When we asked early users of Success+, 59% said it reduced admin cost, while 63% said it improved cash flow. 89% of testers saved time using Success+.**
Every payment that doesn’t require chasing down your customers is time given back to you to do what you do best.
These are great indicators that Success+ can have a real, tangible impact on your business, but there’s much more to payment success than cold hard cash. 70% of our testers, for example, said it improved their relationship with their customers.
The very first tester, smart-home insurance provider Neos has been using intelligent payment retries for 12 months and has seen their retry success rate almost triple.
“With Intelligent Retries, almost 90% of retried payments are successfully collected, where before we were only collecting 30-40%.” - Monsur Alam, Head of Finance, Neos.
Start transforming your payment experience today
It’s great to finally share Success+ with you, and we can’t wait to bring you everything else that’s planned with recurring payment intelligence.
Existing GoCardless customers can now simply log on to GoCardless and start using Success+ today.
If you’re new to GoCardless, find out more here and join over 50,000 other businesses already using GoCardless.
Note: Right now, Success+ is currently available for Bacs payments (GBP). Further schemes and currencies will be available to Success+ over the course of the year.
* 76% figure is an average based on 3 retries during a 4 week period, as per a sample of 1000+ in November 2019.
** Based on a November 2019 survey of 30 Success+ alpha testers.