How an EdTech platform decreased overall churn by 20%
Learn how an online learning platform partnered with Butter to optimize payment recovery, resulting in substantial revenue growth and churn reduction.
18%
increase in payment recovery rates
4.5%
increase to top line ARR
20%
reduction in churn
Overview
An online learning platform with over 2M learners aiming to build skills via virtual interactions and projects was suffering from artificially inflated rates of payment failure, with more than half of all attempted payment transactions on the platform failing within a given year. The end result — millions of potential learners missing out on the opportunity to build their own skills, and millions in lost ARR.
Quick Jump
The Challenge
In the course of a single year, more than 1.2M legitimate payment attempts failed
The company needed a solution to address the ‘leaky bucket’ of silently churning users. Silently in the sense that these users were not churning through traditional 'unsubscribe’ methods, but rather their payments were automatically failing.
For every 100 payment attempts, only 44 were successfully completed.
The company was bleeding users who wanted to pay to learn—causing pain both for the company, and for its customers who wanted to better themselves by learning new and valuable skills on the platform.
The Solution
Butter’s ML-powered approach ensured recovery speed and efficiency
The EdTech company engaged Butter to handle the problem of artificially inflated failed payment rates due to improper payment configuration - timing, cadence, and presentation.
First, Butter’s proprietary algorithm sorted between legitimate failed payments and true failed payments. It was identified that ~60% of all failed payments on the platform were indeed legitimate attempts to pay — indicating willingness of an end user to use the platform, but inability to access it due to the underlying billing infrastructure.
Butter then introduced an ML-powered approach to scheduling payment collection attempts.
The company is now able to proactively prevent subscriber churn, identifying at-risk billing infrastructure and updating payment presentation accurately to ensure everyone who wants to pay to learn can.
The Results
Butter’s payment recovery solution led to 4.5% increase in top line revenue
Targeted interventions led to a massive decline in involuntary churn at the company—totaling nearly 5% of top line revenue. The company realized massive improvements in the rate of payment updating for lapsed users—approximately 20% more users.
As a result of these cumulative changes, the company realized a massive benefit in revenue saved that accounted for more than $1M in revenue savings.
The company is now able to better serve recurring customers, and spare users the inconvenience of being involuntarily kicked off a service they rely upon for everyday learning and productivity.