What does involuntary churn mean?

Involuntary churn refers to the loss of customers caused by failed payment attempts rather than a deliberate decision to stop using a product or service. This can occur due to issues like expired credit cards, insufficient funds, or technical problems with the payment system.

What is the difference between voluntary and involuntary churn?

Voluntary churn occurs when customers actively decide to stop using a product or service, often due to dissatisfaction or changing needs. Involuntary churn, on the other hand, happens passively when payments fail due to issues such as expired cards or insufficient funds, without the customer intending to leave.

What causes voluntary churn?

Voluntary churn is typically caused by dissatisfaction with the product or service, such as poor customer experience, lack of value, or unmet expectations. Additionally, customers may leave due to changing needs, better offers from competitors, or a mismatch between the product and their current requirements.

What are the stages of churn?

The stages of churn typically include early warning signs, active dissatisfaction, and the final act of cancellation or departure. Identifying these stages allows businesses to intervene proactively to address customer concerns and retain their loyalty.

What is the leading indicator of churn?

The leading indicator of churn is a decline in customer engagement. Reduced usage frequency, decreased interaction with the product, or lack of responsiveness to outreach efforts often signal that a customer may be at risk of leaving.

Author

Ray Watson

Ray Watson is the Senior Vice President of Channel Partnerships at FlexPay, a leading payment recovery solution for companies with recurring and subscription revenue. With over 20 years of experience in the global payments industry, Ray has held strategic roles at JPMorgan Chase, Ingenico ePayments (acquired by Worldline), and Litle & Co (now part of Vantiv/FIS). He holds an MBA from Texas Christian University (TCU).