How to deal with passive churn

In case you’ve been asleep these past few months, you’ll know that we are facing a very complex economy. It’s in times like these that a CFO can sink or swim.

When the chips are down, the most important question is: what kind of a CFO are you?

Because if you are not doing everything to ensure a healthy stream of revenue, that’s a financial fail.

And you want to be the Chief Financial Officer, not the Chief Failure Officer.

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That’s why we need to talk about passive churn.

Passive churn is an epic fail

If a customer decides they don’t want or need your subscription anymore, and they cancel it, that’s a fail. If they move to a competitor because they are no longer happy with what your subscription provides, that’s also a fail. 

But perhaps the worst churn of all is the unnecessary churn that could easily have been prevented. That’s passive churn, which basically means “failed transactions.”

When the customer is satisfied with your subscription and wants to stay connected, but they can’t or don’t because of payment friction, it’s a failure that just did not have to happen. 

Deal with churn

The good news is that passive churn is solvable.

In a difficult economy, that 50% can be the difference between sinking and succeeding, between Finance Officer and Failure Officer.

Dealing with passive churn demands the right tech stack to identify and prevent passive churn, and the use of automated mechanisms to rectify failed transactions 24/7 and recover the maximum possible amount of lost revenue. 

Not just “reducing expenses”

When the economy is suffering, CFOs look for ways to cut, cut, cut. Every expense and salary is analyzed, and any ounce of fat trimmed to maximize the financial outlook. 

But reducing expenses isn’t enough. What about analyzing the income that is already owed to you, but not coming in for whatever reason? What about examining the customer relationship with every aspect of the subscription – including recurring payments and renewals – to make sure there is no friction, no disruption, and no excuse for passive churn?

Be revenue focused

The best CFOs take a proactive stance when it comes to passive churn. In these problematic financial times, it’s not just about saving money, but also recovering money. It’s about being revenue focused from every direction.

By Jesus Galloway, Chief Strategy Officer, Vindicia. To find out more about Vindicia click here