Challenge
The Senior Vice President (SVP) of a home security business has played a pivotal role in the company's expansion over the past 11 years, having taken on leadership roles across Finance, Customer Experience, Revenue, and now heading Technology as President of the company's proprietary CRM system. This comprehensive experience has given the SVP a deep understanding of company’s strategic priorities. He explains the importance of customer retention and loyalty for their company: “In the alarm industry, profitability from a customer takes years to achieve. After absorbing the initial acquisition costs, installing each system involves significant upfront investments in equipment, labor, and either sales commission or web marketing. If we don’t excel in retaining customers, we won’t remain in business.”
This insight has driven their strategy of vertical integration. However, one of their most unexpected challenges came from an unforeseen area—credit card payment processing.
Initially, the business accepted payments via ACH (direct bank transfers). Since most early customers were acquired through in-person sales, ACH payments were easy to set up. But as the business expanded its internal sales teams and added DIY systems, credit card payments became the norm. The company quickly learned that processing credit cards (CC) was much more complex than ACH transactions. A major challenge emerged when the first payment processed successfully, but subsequent payments saw an unusually high decline rate.
The SVP remembers the steep learning curve the team faced while comparing ACH and CC success rates: “We made many mistakes early on. We didn’t validate card CVV or AVS, and we even allowed gift cards and prepaid cards for recurring payments.” Even after fixing these initial issues, their payment success rates remained suboptimal.
“Our vendor delivered on their promise. They’re great to work with, and I can text if there’s something urgent and get a response. They’ve been an excellent partner.”
Solution:
Determined to address the failed payment issue, The SVP researched specialized technology solutions that target this often-overlooked problem that can significantly impact subscription companies. As he navigated conflicting advice from different vendors, one vendor stood out. The vendor's Customer Success team provided clear insights into the underlying causes of payment failures and recommended best practices for optimizing the company’s payment systems. With their support, company integrated an AI-Powered Recovery Solution into their in-house CRM system, enabling them to respond to declined transactions as soon as they occurred.
Results
After integrating with the AI-Powered Recovery Solution, the SVP was delighted with the outcome: “Our vendor delivered exactly what they promised. Their team is fantastic to work with, and if there’s an urgent matter, I can text them and get an immediate response. They’ve been a great partner.” The AI-Powered Recovery Solution works within the payment ecosystem to resolve failed transactions swiftly, preventing customers from ever being aware of payment issues.
Always looking to enhance performance, the SVP’s team was the first to implement the AI-Powered Recovery Solution, which extends the recovery process through direct customer outreach. Complementing a technology recovery, is an active recovery process that deploys fully branded and personalized email sequences that seamlessly match the company’s brand voice. These communications, guided by behavioral science, are designed to optimize recovery and retention. The technology recovery solution had an immediate impact, with 34% of customers resolving their payment issues within a month. This significantly reduced the company’s churn rate.
Over the past year, the AI-Powered Recovery Solution has recovered an impressive $1.7 million for the home security company, not including the Lifetime Value of customers who continue their subscriptions after recovery. The SVP couldn’t be happier with the results: “Our vendor feels like an extension of our internal team because they play such a critical role in capturing revenue for our business.”
"I could categorize our vendor as an internal department because they play a huge role in capturing revenue for our business."
Senior Vice President of a Home Security Company
About the Home Security Company
The company is a top home security provider in the United States, safeguarding over 300,000 homes from burglaries, fires, floods, and medical emergencies. With a focus on reliability and excellence, the company has embraced vertical integration, allowing them to control every aspect of their business. They design, manufacture, and own their alarm equipment, and manage customer relationships through an in-house CRM. Customer support is handled by the company’s owned call centers in the Western U.S., Central America, and the South Pacific. Distribution of DIY orders and additional equipment is managed through their Tennessee fulfillment center.
Is your business experiencing failed recurring payments? Contact us today to explore solutions that will recover up to 80% of your failed recurring payments, increasing your cash flow, customer retention, and profitability.
