MasterClass recovers 27% more revenue with Butter
Get the story of how MasterClass, a personal growth streaming platform, used Butter’s industry-leading payment optimization platform to improve subscriber retention and put more revenue in their pockets.
27%
increase in recovered revenue
26%
boost in invoice recovery
31%
decrease in refunds
“I always had a suspicion that there was more to do on the payment side, but we didn't think the money was there. What changed was a full-funnel analysis and learning about Butter's data science approach to payment optimization.”
The Challenge
MasterClass sets eyes on payment optimization
Involuntary churn is an unavoidable issue that affects all subscription businesses.
The main culprit? Failed payments caused by complicated payment infrastructure and customer-related problems like outdated customer information, missing funds, and fraud.
In 2023, MasterClass had a better-than-average industry churn rate thanks to an in-house team of retention experts. However, after analyzing their subscriber journey, the streaming platform saw an opportunity to optimize further.
MasterClass’ solution was to partner with a dedicated payment recovery platform.
Working quickly, MasterClass piloted two different competitive recovery solutions. Then, they tested Butter’s recovery solution and never looked back.
“Butter’s data-science approach made sense,” said Chris Nichols, MasterClass’ VP of Growth Analytics, Insights, and Data. “We had another solution but were curious about what Butter could deliver.”
The Solution
Migrating to a new payment recovery platform to maximize profit
MasterClass migrated to Butter because of the platform’s advanced machine-learning technology, self-optimization capabilities, and holistic approach to recovery that delivers better overall payment health.
Machine-learning technology for better results
Unlike other solutions, Butter analyzes hundreds of data points associated with every transaction to determine the most effective strategy for each category of failed payments. The result is a highly impactful individualized approach.
Most recovery solutions use a one-size-fits-all strategy, also known as a woodpecker model. This approach uses scheduled retries and the same retry strategy for all failed payments, which can damage a brand’s payment health.
A woodpecker model can increase chargebacks, which, in turn, can lower your Transaction Authorization Rate (TAR) and Merchant ID (MID) score, resulting in even more failed payments.
A holistic approach to minimize chargebacks
A holistic strategy doesn’t only impact spend efficiency and conversion metrics. The right payment recovery strategy creates a ripple effect, improving overall payment health.
Butter’s approach minimizes subscriber chargebacks by decreasing time to recovery. This approach ensures payments are recovered quickly instead of weeks or months post-purchase when a customer no longer expects the product, which leads to a higher dispute volume.
Self-optimization for continual improvement
Butter continually analyzes an organization’s failed payment data to determine which strategies work best. Over time, digital subscription businesses like MasterClass see improved results without investing additional resources.
“It’s the promise of us gaining the benefit of smart optimization with having to do as little as possible,” Chris said. “It’s as close as you can get to set it and forget it.”
The Results
MasterClass sees 27% jump in recovered revenue with Butter
After three months with Butter, MasterClass retained more subscribers, recovered more revenue, and boosted efficiency by lowering refunds.
Butter’s results:
- 26% increase in invoice recovery
- 27% surge in recovered revenue
- 31% decrease in refunds
Grow ARR 10%+ with Butter
Book a consult with a payment expert to understand the impact of failed payments on your business. It’s time to end involuntary churn, accelerate growth, and maximize profits.
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