A successful business focuses on more than customer acquisition: it puts existing customers at the heart of its strategy. That means meticulously measuring and addressing the reasons why customers end their subscriptions.

Preventing involuntary churn—where a customer intends to renew a subscription service but the payment method on file fails when charged—can be easier than combatting voluntary churn. With the right billing system, businesses can set up automated retry policies and dunning workflows to recover these failed payments. However, in reality, most subscription business leaders lack the unified tools and data to prevent involuntary churn and say that their billing system is actually thwarting growth, rather than accelerating it. 

In our new report on the state of billing, we highlight trends and insights from more than 2,000 subscription business leaders from around the world. We learned that churn continues to be a looming concern, with 72% of survey respondents saying they are worried about churn impacting their bottom line. Here’s what’s holding subscription businesses back, and what they need instead to successfully combat churn.

Businesses don’t have the tools to understand and address churn

While the majority of business leaders we surveyed are concerned about the impact of involuntary churn on their bottom line, many don’t have access to the right data to understand its effects on revenue, or don’t introduce the right strategies—such as retry policies—to combat it.

Businesses should be able to rely on their billing systems as a source of truth for revenue metrics and overall financial health. For involuntary churn, Stripe data shows that when a monthly subscription is recovered, the subscription typically lasts another seven months on average. This compounding effect highlights that small optimizations can make an outsized impact and underscores the importance of understanding churn. In reality, however, subscription business leaders report that they are juggling disparate data sources and trying to piece together incomplete or incorrect data to understand the underlying cause of churn.

Leaders want to unify billing and payments in order to combat churn

Fifty-five percent of business leaders are considering switching to a new billing provider. Almost as many business leaders say they’re considering a unified payment system to combat churn, and 52% believe the most important feature would be an “automated billing system.” In other words, the data shows that business leaders not only want to switch billing systems, but they prefer one that unifies payments and billing in one platform. 

A unified billing system includes a range of revenue recovery tools that both minimize the chance of failed payments and help you recover lost revenue. For example, you should be able to:

• Recover more revenue by retrying payments when they have the best chance of success
• Build custom, no-code automated workflows to improve your revenue recovery efforts, such as creating a custom dunning flow for annual subscribers and notifying your team when high-value invoices are overdue
• Understand, analyze, and mitigate involuntary churn with granular analytics and reporting, and access a quick overview of your failed payments and recovery rates to understand how to further improve your revenue recovery setup
• Automatically notify customers of upcoming renewals and expiring cards 

We’ve seen firsthand how these features can help businesses recover significant revenue. For every $1 spent on Stripe Billing, Stripe users recovered $9 on average. In 2023 alone, Stripe’s revenue recovery tools saved 57% of failed payments and recovered $5.32B in total revenue for Stripe users.

More trends from subscription business leaders 

To learn more about how business leaders are combatting churn, download our report on the state of billing systems. We share additional trends from subscription business leaders, such as how they plan to evolve their pricing models and expand to new markets.