How to measure involuntary churn
Split cancellations by cause. Involuntary churn rate is the subscribers lost to unrecovered payment failure in a month divided by subscribers at the start of the month. If a service with 10,000 subscribers loses 500 in a month and 150 of those were payment failures, involuntary churn is 1.5% and voluntary churn 3.5%.
Track the recovery rate too: of the renewals that failed first time, the share eventually collected.
Why it deserves separate attention
It is commonly a fifth to two fifths of all churn, and it is the easiest part to reduce, because nothing about the content or the price has to change. The subscriber wanted to stay.
How to reduce it
- Retry failed charges on a schedule, at varied times
- Email and notify in-app with a direct link to update the card
- Keep access open during a short grace period
- Warn subscribers before a card's expiry date
- Use account updater services that refresh replaced card numbers
- Offer payment methods that fail less often than cards in each market
- Process payments locally, where banks approve more charges
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