Recovery ROI Is Not a Percentage. It Is a Headcount Decision.
To: The operator deciding whether to staff recovery or automate it From: Billing operations Subject: What recovery actually costs, and what it returns Every subscription business I have worked with has quoted the same number in the same meeting: our recovery rate is twenty-something percent, as if that percentage settles whether recovery is worth doing. It does not. A percentage has no salary, no…
When discussing whether to engage in recovery efforts or automate the process, many subscription businesses focus on a single percentage metric: the recovery rate. However, this percentage does not accurately represent the true costs and benefits of recovery. The real cost lies in the human effort required to manually recover payments, which is not captured by a simple percentage figure.
A higher recovery percentage can be misleading because it may not account for various factors like the volume of failed payments, the type of decline, and the timeliness of recovery. Moreover, recovery is not just about the monetary return but also the long-term value of retaining subscribers. The decision to automate or not should be based on a headcount decision, weighing the revenue potential against the actual hours of manual recovery work.
Automated sequences can replace the repetitive middle steps of recovery, allowing staff to focus on high-value tasks, while still maintaining a personal touch for exceptions. Therefore, when evaluating recovery options, use concrete figures and the actual hours spent on manual work, not just the recovery percentage, to make an informed decision.
Written by urgent.news from Dev.to's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
