Payments churn innovator Butter raises $22mn in funding
Silicon Valley startup Butter, which has built an ML-powered engine to reduce churn in online subscription payments, has raised US$22mn in Series A funding
Churn Rate – Marketing
Dr. Phillip Hartley explains what is Churn Rate in Marketing.
Median Involuntary Churn Rate by Subscription Industry:
In this episode of Truth in Data, PaymentsJournal explores the median involuntary churn rate by subscription industry.
Reducing Churn: AI Customer Success Meets Subscription Billing
Read a blog about spreadsheets and why they don’t cut it anymore as one source of truth in SaaS: https://hubs.ly/Q01fmnVQ0
Or check out a blog about subscription management and SaaS:
The on-webinar on reducing churn in subscription-based businesses featuring expert speakers from Younium and Churned, including Linda Bergh, Customer Success Manager, and Wolter Rebergen, Commercial Director, both from Younium, and Maarten Doornenbal, Co-Founder of Churned.
Join us as we delve into the importance of reducing churn and how you can leverage AI and subscription billing to keep your customers engaged and retained. During the webinar, you will learn about:
– The impact of churn on subscription-based businesses, and the cost of losing customers.
– Common reasons why customers cancel their subscriptions and how to avoid it.
– The concept of AI customer success, how it helps identify potential churn risks and provide proactive solutions.
– The role of AI in customer engagement and retention, and how it can help build a loyal customer base.
– The importance of subscription billing in reducing churn, and how optimizing your billing process can lead to better customer retention.
-The benefits of using a subscription management platform to streamline your subscription business.
Watch Younium in Action light free demo: https://bit.ly/3ndJSNk
Subscribe to Younium YouTube Channel ► ► ► https://bit.ly/2UwPfeu
Younium is the tool that integrates into your existing systems to streamline subscription management, invoicing/billing, financial reporting, and data insights. Now your growing business can have full control of subscriptions, more easily implement scalable processes, and harness more accurate metrics – meaning you spend less time on manual administration and never miss an opportunity to secure revenue.
Follow us here:
Website ► ► ► https://www.younium.com/
LinkedIn ► ► ► https://www.linkedin.com/company/youn…
Butter raises $7M to end ‘accidental’ customer churn due to payment failure
Vijay Menon , a statistician by trade, began his career at Microsoft. It was there that he realized there was an astounding number of subscriptions that failed to renew or even go through to begin with due to payment-related issues. He became intrigued by the problem, and solving it. Ultimately in 2016 alone, he helped the company recover over 10 million Xbox Live subscriptions, which resulted in over $100 million in recovered revenue. In his subsequent roles at Dropbox and Scribd, Menon realized the problem of accidental payment churn was not exclusive to Microsoft. It was a challenge that plagued all B2B SaaS businesses. “Every subscription company deals with this black hole,” he said. Payment failure, in fact, is the among the biggest causes of customer churn and represents nearly half of all subscription churn. Even more alarming, Menon came to understand, the companies weren’t even aware of what was happening. False declines are estimated to be a $443 billion problem by the end of this year, according to Cardinal Commerce ), resulting in millions of lost subscribers. The accidental churn is often not just due to problems with renewals, where people get frustrated by failed attempts to charge their credit card, for example. It is also largely a problem at the sign-up process, especially in countries outside the U.S., where charges are often falsely declined due to being attempted in another country. To Menon, it was a massive market severely underserved by traditional payment service providers such as Stripe who are strong domestically, but in his view, were poor at clearing international payments in growing markets like Brazil, India and Mexico. Menon estimates that on average, 4% of subscription customers are lost to legitimate payments failing. Consumers outside the U.S. might be clicking submit on a given, but if they’re using a card form that’s configured for the U.S., they could be getting rejected, and “no one’s really checking on what happens after the user drops off,” Menon said. So in 2020, he teamed up with venture studio Atomic to found Butter , a startup aimed at helping companies retain existing customers and sign on new ones by preventing this accidental payment churn. Using machine learning, Butter aims to end the churn by preventing drop-off from legitimate payments. Atomic has launched 14 startups in the last 12 months (and they’re getting funded); here’s how it works “We focus on two problems that can affect any subscription business, which is basically ‘how do I check out a payment upfront and make sure that payment actually goes through?,’ ” Menon told TechCrunch. “The other part is, what do we do when a payment fails?” The San Francisco-based startup has raised $7 million, largely from Atomic, to tackle the problem. In a year’s time, it has also signed on about a dozen consumer subscription companies, including some large names (which he declined to reveal publicly), doing $10 million to $500 million in revenue — many of which have an international user base. It claims that it helps these companies find, on average, $1 million of revenue per year. Its revenue-sharing model is designed to align incentives with those of its customers. It charges a percentage of what it saves for its customers. For example, Menon estimates that a $100 million ARR company would be able to see $1 to $4 million in ARR lift which is a lot, and a $500 million ARR company, around $2.5 to $5 million. An economy increasingly reliant on subscription models places new challenges on existing payment systems that are typically out of date, complicated, vary by country and constantly changing based on new fraud rules, according to Menon. “Even massive companies like Netflix and Spotify who have invested significant internal resources – payments engineering teams – in this problem, struggle because the payment landscape changes so frequently,” Menon told TechCrunch. “The Butter payments intelligence platform was built to scout through obscure payments networks to find what is broken.” Image Credits: Butter Butter plans to use its new capital to do “top of the funnel optimization,” according to Menon. When a consumer checks out, there are about 128 different data elements that can be presented with every payload, he said. “We’re investing into the capabilities that will be able to make decisions [around those elements] in real time so that these folks coming in through the funnel will have a much higher likelihood of that payment going through,” he added. Long term, he said, the company aims to build an AWS, or operating system, for payments. “We’re trying to build a connective tissue for the entire payments ecosystem. We sit above what we call the payment service providers so we’re not Stripe, we’re not Braintree, we’re sitting above them,” Menon explained. “We