How to Use Account Updater to Increase Your Approval Rates

May 11, 2018 · 3 min read

If you’ve come within ten feet of a subscription billing service, you’ve probably heard the term “involuntary churn.” But in case the term is unfamiliar to you, we’ll explain. Involuntary churn is when a previously happy, paying subscriber is lost due to circumstances like an expired credit card or a declined transaction. It’s “involuntary” because the subscriber didn’t choose to end their subscription, rather it ended due to inaction on the subscriber’s part.

Involuntary churn is extremely common for subscription businesses. A subscriber signs up for an ongoing subscription with one payment method, likely a payment card. Over time, that payment card will expire or the subscriber’s payment card could be compromised. In this post, we’ll address a simple way to stop subscribers with expired cards from churning.

How to Prevent Expired Card Declines:

We recommend a strategy that, whenever possible, seeks first and foremost to prevent expired card errors. Getting new card information before the card expires reduces the risk of churn, and keeps your revenue predictable. Strategies for proactively updating credit card information before they expire include:

Account Updater Services

Certain issuers offer services (like MasterCard’s Automatic Billing Updater and Visa’s Account Updater) that can keep your card-on-file data current. These services automatically update customer records in the event of an expired card, lost or stolen cards, or account upgrades and portfolio conversions. Please note that only certain issuers participate in Account Updater — and coverage varies dramatically from country to country.

We strongly recommend looking into Account Updater services because it offers a seamless experience for both you and your subscriber. Your records will stay current, so your customer won’t churn involuntarily, and the customer won’t have to take steps to update their information.

Ask Customers for Their New Number Before the Old One Expires

If Account Updater won’t work for you or isn’t offered in your country, we still recommend the old fashioned way — talk to your customers! Depending on the nature of your relationship with the customer, and the subscription services you provide, it can be highly effective to reach out to your customer 30 to 60 days in advance of expiration to ask them to update their payment information.

In some businesses, this is a risky strategy, since it may give the customer an opportunity to reevaluate your service, and potentially churn voluntarily. You know your business better than anyone else: if your customers are loyal and your service is extremely high-value, you should try this approach. And if you know the customer will definitely churn due to an expired card, it can’t hurt to try.

A recurring billing service can help you manage these tasks, and help increase your approval rates and customer lifetime value with many other tools. Not sure where to start when it comes to finding a subscription billing company that fits your needs? Download our free Six Must-Haves guide, which covers the features you need in a subscription billing service, why you need them, and comes with a bonus feature checklist:

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