Name: Stack Up Against the Competition | Using Benchmarks Strategically
Uploaded: 2025-06-26T15:46:03.604Z
Duration: 30 min 4 s
Description: Stack Up Against the Competition | Using Benchmarks Strategically

Transcript for "Stack Up Against the Competition | Using Benchmarks Strategically": Hey, everyone. Welcome. Thank you so much for joining us today. We've been counting down to this session. This is session number two in our reporting and benchmark series. If you were on with us yesterday, Matt Shipley was with us and covered the reportings the reporting portion of this, series. And today, we have Dan Shipley. You may know him. He may even be your customer success manager. So thank you so much for being here with us today, Dan. Absolutely. Thank and we're gonna start off with a quick question for you guys to answer in the chat. What's the weirdest metric you wish you could track? It does not have to be a Recurly metric. It doesn't even have to be business oriented. You can just drop any life metric in there. We'd love to see what you have to say. And while y'all are having fun, we're gonna go ahead and go through a couple of housekeeping items to make sure you get the most out of this session today. Just so you know, this is a recording, but we are here live answering questions in the chat. So drop any questions you have, and you will receive this recording in email in the next couple of days with all of the follow-up resources. When you do ask questions, if you put your questions into the q and a section, that helps us keep them organized, make sure we don't miss anything. We will be watching the chat just in case, but we'll definitely be keeping an eye on that q and a. Also, if you look next to your q and a area, you'll see a place to download resources. This slide deck is in there, so you can follow along with Dan. And there are also other links and things like that that you might really appreciate. Alright. Okay. So, Dan, I'm gonna hand this over to you. As is as, we said earlier, Dan has been here for about four years. He's a senior customer success manager here at Recurly, and you may know him. So, Dan, the stage is yours. Thank you. Hi, everyone. Dan Shipley here. So I have been with Recurly coming up on four years, I believe in September, As a strategic customer success manager, I manage some enterprise merchants that we have, and my primary goal is to help their subscription business grow, reduce churn, get the most from their data, and optimize them in all areas payments. I'm a bit of a payments nerd. I've been in the industry for nearly twelve years now, with a history of working at some acquirers and gateways in the past, mostly managing merchants there. So, super excited to talk to you guys today about benchmarks, and we can, go to the agenda here. So today, we are going to be reviewing and defining the benchmarks, the reporting, and the KPIs around the benchmarks, and then we'll go into each individual benchmark. So we'll explain how to interpret the benchmark, how to compare yourself to your peers, and then get into why you should consider optimizing each of these areas and maybe some strategies that other merchants have used to improve some of, these metrics. And then finally, we will pass things back to Ashley to take us home on some helpful resources. Alrighty. So here at Recurly, we have no shortage of data, and we try to make it as easy as possible for you to access that massive amounts of data that we have on our platform. And you have the traditional ports, reports that you would see within your Recurly dashboards, which includes benchmarks. You have exports that are designed to be pulled manually or automatically exported. And, maybe you have a data warehouse you'd like to pull data into. We offer webhooks also that can be absorbed, if you prefer to pull certain data points that way. And then we have a relatively new feature known as Explorer, which is powered by Google's Looker, allowing you to further slice and dice your data if perhaps there isn't a dashboard that exactly dials into what you're looking for and meet your data's needs. But I will add a subnote that that, that feature is only available on certain plans here at Recurly. And if you are interested in having that feature enabled, reach out to us. We'll point you in the right direction. But finally, our newest release in Explore, is our Explore Assist, which kind of piggybacks off our Explore release. This tool, is a conversational type AI tool where you can query data that is in plain English. So you can ask, the report something like show me all invoices in Dunning and what day of Dunning they're in, and then it will pull query that report within Looker. You can then export that report, save it to be rerun later, and do with it what you will. So, that's kind of a brief overview. I think, Matt, yesterday, went over a, more in-depth session, but, we'll get into the benchmarks here. So some of the definitions. Right? This is this will help you get a baseline of how these these benchmarks are defined. We'll start with acquisition rate, and that is simply the total total paid subscribers divided by total paid subscribers I'm sorry. Total paid subscribers acquired divided by total paid subscribers. Sign up decline rate is the percentage of initial payment temps during sign up that are declined. So we, with that metric, are not including retries at sign up. We are only looking at the first attempt. And then we look at voluntary churn rate, which is the percentage of paid subscribers who cancel their subscription on their own. And then involuntary churn, the percentage of paid subscribers lost due to payment failures. This is usually, where they don't have intent to cancel. There's just an issue with the payment. And then there are renewal invoice pay rate benchmarks. That's the percentage of all invoices that end in a paid state. Decline rate at renewal benchmarks, the percentage of invoices that are declined on first renewal attempt, and then declined recovery rate is the invoices that end up in a paid state of all invoices that enter Dunning, and churn rate, which is total paid subscribers divided by I'm sorry. Total paid subscribers churn divided by total paid subscribers. So don't worry. You don't have to memorize all that now. We'll get a little bit into the definitions, individually as well, and I'll I'll be providing some examples. So acquisition rate, I wanna pause briefly and just talk about how to read the benchmarks in general. So every time you get to, a benchmarks page, you're gonna see a couple settings at the top here. You can set your date range in which you wish to view your data. You can select your own industry. I think a lot of merchants have a preselected industry just based on what we categorized you at at sign up. If you think there's a better industry under that drop down list that you pertain to, you can simply select that and the benchmarks will update. Then you have a a timeline and subscriber type. So if you want to, for example, segment trial users versus paid users, you can do that there. Trial data tends to skew some of the dashboards quite a bit, like, sign up to clients and so on. So I recommend playing with that drop down a little bit to see how it impacts your data. As far as looking at a benchmark individually, you'll notice four lines, and those lines the gray lines represent quartiles. So you'll you'll see there's little carrots or squares on the gray lines. The downward carrots is the bottom percentile of the merchants that are into your industry. So the bottom performance, the square is the, mid quartile. So how, what's the median range in which those merchants are performing within your industry. And then the top caret are the top quartile merchants and how they're performing. And then, of course, we have the the aqua blue line, and that's gonna be your trend line. So you can easily compare where you fall, in which quartile according to the industry that you're in. So with the, interpretations complete, we'll get into acquisition rates specifically. So we'll talk about, who's eligible. Right? So this metric includes only paying subscribers and excludes users who are in trial or in Dunning, meaning their trial is over and we are actively trying to recover their failed payment. We define this by calculating total paid subscribers divided by total, total paid subscribers acquired divided by total paid subscribers in any given period that you're looking at. So we have several features to is assist with acquisition, including our recurrently engaged product. And I'd recommend optimizing your trials, maybe looking at coupons, discounts, introductory offers, optimizing your checkout experience, by offering localized currencies, languages, and, lastly, maybe offering a range of payment methods that are available through Recurly today to ensure you're hitting your target market. So as mentioned previously, when we are talking about sign up declines, we are looking at the first decline only. We do not include retry attempts. So our reporting on declines is a little unique because our merchants are in a recurring space. If we were to report on declines similar to the way gateways report, it's gonna give you a false sense of how you're really performing, because it's gonna be including retries, which brings your approval rates down. It makes it seem like you're having a problem and that you're not within their, maybe, industry of, performance. Because we're in a recurring space, we only look at the first attempt on sign ups and the first attempt at renewals, and that gives you a clear picture of how you're performing. And I think where the benefit comes with sign up declines in particular, lower decline rates equals higher approval rates and higher acquisition, and that means lower gateway costs from retries, all good things. So ways that you could use this report, it could be an early indicator of problems with transactions. Right? So maybe you are having a fraud attack and you don't know about it, and you come into the sign up to client report, and you can see, fraud gateway or maybe one of the fraud responses from the issuers coming back very elevated, and you're seeing those spikes. So that's a very early indicator that you could be under a fraud attack, and you can get out in front of that. The other thing is that you could use it to compare gateway performance. Maybe you're standing up a new gateway and, you know, you're trying to see, is this gateway gonna offer me better approval rates at sign up? We can come in here, put it side by side on against your other gateway and see how that's performing to help you make decisions on how to route your transactions. Real life example. So I was working with a merchant, and during review of their data, we did, in fact, notice elevation in fraud responses coming through. We identified that this was in fact card testing and that the merchant was able to implement a CAPTCHA to kinda stop the bleeding. I don't think, we'd recommend a CAPTCHA as a long term solution. And while we realize it does create friction at the sign up, it was more important at that time to stop the the card testing going on, so we eventually looked at investing in a more robust fraud tool down the line that could help detect these, attacks earlier. But, because we caught it early, the merchant impacts were overall low, and we kept them out of trouble with Visa's chargeback program, which is always a good thing. Okay. We can move on to churn management. So probably one of my favorite metrics to track here at Recurly, being in a subscription space, it's really critical to have many strategies in place to reduce churn as much as possible. We define churn as the portion of subscribers, lost during a specific time period compared to the total number of subscribers at the beginning of the time period. And we break this down into three different categories. We have combined, we have involuntary and voluntary. So combined is self explanatory. That's the combination of your involuntary churn versus voluntary churn, and these should be monitored separately when you wanna start optimizing. But the combined stack gives you a good overall baseline of are the changes that I'm making actually impacting my business in a positive way, or maybe I'm seeing some negative trends and we can dig into that and try to resolve those. So churn is a great metric to monitor because you can uncover why your subscribers are leaving. You can identify negative trends that may point to underlying issues, and you can monitor churn reduction strategies and their performance over time. So you're hopefully, over the life cycle here at Recurly, we have a lot of great documentation focusing on voluntary churn and involuntary churn. Hopefully, you're implementing a lot of these strategies and see positive trends over time. So focusing just a little bit on voluntary churn, we currently have several ways where we can help you within this metric. I'll I'll just name a few, pausing subscriptions. So we released a, recurring report recently. Just looking at 2024 as a whole and subscriber trends, that shows that, a large portion of users return if you're able to offer them a pause subscription. So this keeps the relationship warm and we and makes reactivation super frictionless because they're already scheduled to be reactivated. This is also great for seasonal subscriptions too. If you have a business that runs a little seasonal, maybe you offer plans that people would like to pick up. Certain times a year, they can just simply hit pause, and they'll be back next season. The other the other thing I would recommend, check out plan segmentation. This is a new feature that we've come out with where you can target cohorts of your customers by price, geography, or, certain features that you may be offering within your plans. And then the last one, of course, check out Recurly Engage to inset assist with, cancellation flows and save offer capabilities. And finally, focusing on involuntary churn specifically, here are some quick areas where you could check out optimization. There's a couple that we have out of the box. That's intelligent retries. So depending on your Dunning window length, Recurly will retry a certain amount of times within that Dunning window. We have expired card management. So Recurly is able to detect a if a card will be expired at the time of renewal. So, we will automatically apply an expiration date forward to that card to prevent a decline. And then some areas where you could check if you are enabled for, is account updater. So if enabled, Recurly actively seeks updates from card issuers on cards that may have expired or have been reissued. And then we have gateway failover. So for some of you that are considering a multi gateway strategy, knock on wood here, but in the event that your gateway has a hard down situation or an outage, Recurly can detect that and automatically reroute your transactions to another gateway preventing, declines. Another one is wallet. So we have a feature, if enabled, that allows customers to add a backup payment method that where we currently will automatically retry in the event of failure. So you could consider adding this at the sign up flow, offering them an extra field to enter another card, as well as adding it to your Dunning emails. So if you do your customer experiences a failure, maybe they get a lot of failures. Maybe their service gets interrupted a lot. You wanna give them the option within the Dunning email, where they're experiencing that frustration to add another card to to smoothen out that experience. And then the last one for involuntary, I would recommend, focusing on your Dunning email optimization. We'll have a Dunning churn benchmarks session coming up here in just a minute, but we'll get into we'll we'll get into that shortly. But having an optimized dunning cycle is the is a key to reducing involuntary churn. Alright. Renewal invoice paid rate. So the way that I like to think about this is, at the end of the day, am I getting paid? So we could toss aside decline rates or retries or dunning cycles or initial failed attempts. Is this invoice getting paid or not? So this is going to include invoices on a first attempt and invoices recovered in Dunning through customer, updates as well as our automated retries. The calculation again, just to reiterate it. So we calculate this by the percentage of renewal invoices successfully paid by month's end. The takeaway on this one is as you work towards optimization, just use this as an overall metric to to, to monitor your performance, your efforts around approval rates, dunning optimization, churn reduction strategies, as well as, Recurly's recovery suite. So we talked earlier about sign up declines, and we also have a separate dashboard for renewal declines. It's important to break these out. Sign ups tend to have high fraud related decline reasons, while renewals can see high failures amongst prepaid cards. Having separate dashboards allows you to dig into the failure type and and make changes to have positive impacts on your decline rates. There will be certain strategies that you may implement or, that could target sign up declines, like putting in fraud tools at sign up or, you know, like I said, prepaid strategies on renewals that may impact these rates and having them split out is super, super beneficial. Again, like sign up declines, this is only measuring the first attempt. Recurly's retry engine does take place in the background, but this is only looking at, retry attempts and your gateway will likely show, retries in this metric. So the calculation, of course, percent of renewal invoices declined on the first attempt. I would so some tips and recommendations, I would strongly recommend, looking at account updater if you don't already have it enabled, Recurly offers, their account updater service that you can check out. And I would look at this for all brands. Make sure that, you know, AmEx is updated if you're able to turn that on, Visa, Mastercard, Discover. Make sure all the brands are enabled so that you're maximizing how many account updates are getting applied. Check out your prepaid strategy. Consider blocking non reloadable prepaids because those inevitably churn. You can check out if your gateway offers bin blocking capabilities. We're currently still working on, releasing bin blocking sometime down the road, hopefully. Fingers crossed. And then free renewal notifications. Those are super helpful to give your customers a heads up that a renewal is coming in order to, make sure that they have funds available and that they're not, getting caught off guard. But as you grow, you could also look at a multi gateway strategy and gateway failover. So, not a ton of merchants have multiple gateways. It's a lot to manage, so I completely understand that. But it does give you a lot of options for optimization. You could determine which route has the best gateway cost in which country with which currency or pairing that you're offering, and then which has the highest approval rates and make decisions based off of, those metrics. So the last one I would say, explore alternative payment methods that have higher high approval rates. Right? So it helps with acquisition. People like having alternative payment methods. And in some cases, alternative payment methods are almost required in certain regions because of the market share that they have. Highly recommend, big fan of alternative payment methods. Alright. We'll go on to Dunning benchmarks. So definitely another one of my favorite topics. If you haven't considered optimizing your dunning cycle yet, I strongly recommend checking out some of the wonderful documentation that we have online. It's one easily one of the easiest ways to boost your recovery rate and reduce your involuntary churn. The calculation on this one, pretty easy. It's the percentage of invoices that are successfully recovered after initially entering the dunning process. So as soon as that that scheduled that scheduled payment is failed, it's going to enter your dunning window, and that window is determined by you, the merchant. By default, I believe out of the box, it's ten days. We typically recommend bumping to twenty seven days, on monthly plans if your business allows. And that's what that's gonna do is allow you to send more emails, more touch points to the merchant, and it gives Recurly's retry engine longer to recover that transaction. Not only can we retry a little bit more, but it spreads out the retry attempts, not stacking them up too much. We could potentially hit two pay cycles for customers. Most people in the world get paid on every two weeks. So that enables us to be, hitting that second pay cycle for those, annoying insufficient funds that are notoriously high on renewal declines. So this is all about monitoring how well you're recovering invoices after they failed. I would say, the yeah. The two strategies, just to sum up, intelligent retries happening in the background, Merchant does not have to schedule these. Recurly does them automatically without the customer or the merchant knowing, in attempts to recover that transaction. And then Dunning emails are scheduled by you. Those are configured by you. So we strongly recommend having a decent cadence over your dunning period. I wouldn't say, you know, ten day cycle. Let's not only send one email. Let's send a few, twenty seven days, maybe ten. But you can experiment with this and then leverage done in campaigns to measure the effectiveness of your, the changes that you are trying to make. So, quick tips for optimization. As I briefly mentioned, on monthly plans, we typically recommend twenty seven days. If you have annual plans, you're able to go, up to sixty days if you'd like. And we we do recommend if your business can support a window like that to, test it and see how that performs, it's gonna let Recurly retry significantly longer, and you'll get significantly more touch points via your Dunning emails. Last but not least, account updater, you'll hear that one a lot. This one also helps with this strategy because Account Updater at Recurly is reactive as well as proactive. So we are trying to look for updates prior to a scheduled payment and then applying that payment prior to the transaction even taking place. And then once we recognize a failure, we're actually sending a request for another update. So it's a reactive, account update request, which could theoretically get applied and then recover, that Dunning email. So that sums up the Porsche the Dunning bench or I'm sorry, the benchmarks portion of, our session today. Awesome. Thank you so much, Dan. That was incredibly helpful. And, of course, if anybody has any questions or you need, any additional help, you can always reach out to support. You can check our Compass tool. We have there's lots of access to support there in the UI. And, also, I just wanted to mention that Dan has actually added the pathway to each of these benchmarks at the bottom of each of the slides. So if you are not sure where to look, it's right there. That I thought that was a really great idea. Thank you so much, Dan. Mhmm. Okay. So we'll go on into a few resources. As you know, or in case you didn't know, tomorrow, we actually do have a live office hour session. Dan and Matt will be on this session with us. It'll last for an hour. It's at 10AM tomorrow morning central. I don't have all of our time zones memorized, so I can't promise that I'm correct about everything. But I believe that's 8AM Pacific and eleven eastern. Mhmm. And then it's what? 9AM your time. Right, Dan? It'd be eleven eastern. Yeah. Yeah. So, anyway, don't trust me on the time zone. I would check your own calendar. If you'd like to join that, you can scan the QR code here, or there is a clickable link in this this slide deck that you downloaded. This is not a recorded session. You are welcome to ask any question you need. If you have any specific use case questions, bring those to this session, and this is one on one time with Dan and Matt for your very specific Recurly questions. Alrighty. And then you'll also find at the end of your deck just a list of clickable, resources to help you out with the benchmarks that we talked about today. I'm sure there's a lot more where that came from. Again, if you need anything additional, reach out to support. They are there. We also have a g two review campaign going right now. So if you can find it in the kindness of your heart to scan that QR code and leave us a review, it's very helpful. We're trying to just help inform our product road map, see what you need so that we can adjust. You know? As we grow, we wanna make sure we meet your needs. Alright. That is it. This is the big thank you slide. Thank you so much, Dan. Truly appreciate it. Your expertise was is invaluable. And, again, anybody who has any additional questions, join us tomorrow. Dan is is gonna bring his big brain, and he is going to answer all those benchmarks questions tomorrow too. So thank you so much. Looking forward to it. Sounds good. Thank you. Alrighty. See you again.