Know the Figures

Failed Payment & Dunning Recovery Value

What involuntary churn costs you, and what better recovery is worth.

Replaces: Paid dunning platforms’ own ROI calculators

How to use it

Enter your subscriber base, what they pay, how long they typically stay, and how many payments fail each month. The calculator separates the failed charge from the far larger figure behind it — the future revenue from customers who leave because a card expired.

Where the number comes from

  • Failed payments each month are the subscriber count times the failure rate.
  • Customers lost are the failures you do not recover — failures times one minus the recovery rate.
  • MRR lost is those customers times their monthly value. This is the number most businesses stop at.
  • Lifetime value lost multiplies by the average remaining lifetime, which is the actual size of the problem.
  • The uplift compares the same arithmetic at your current and target recovery rates, and the difference is what better recovery is worth every month.

What goes wrong

The part most calculators leave out.

  • Recovery rates depend heavily on why payments fail. An expired card recovers easily through a card updater; insufficient funds recovers with well-timed retries; a closed account or a hard decline often does not recover at all.
  • Average remaining lifetime is the softest input and it drives the headline. Customers whose cards fail are not a random sample — some were disengaging anyway, so applying the full average lifetime overstates the loss.
  • Aggressive retries carry a cost. Card schemes monitor retry behaviour, some issuers penalise it, and each attempt may attract a fee. Recovery rates near 100% are not a realistic target.
  • Failure rates vary enormously by market, card type and price point. Monthly consumer subscriptions on debit cards fail far more often than annual business plans on corporate cards.
  • The tool cost here is a subscription fee only. Implementation, integration and ongoing tuning are real and not included.

The churn nobody chose

A business with 8,000 subscribers at 65 a month sees 6% of payments fail — 480 a month — and recovers 45% of them. The 264 it does not recover look like a 17,000 MRR problem, which next to a 520,000 MRR base seems tolerable. But those customers would have stayed another 22 months on average, so the real loss is roughly 378,000 of lifetime value every month. Lifting recovery to 70% saves 120 customers a month, worth about 172,000 of lifetime value monthly, against a tool costing 500. None of those customers decided to leave.

Questions

What is involuntary churn?
Customers who stop paying because a payment failed rather than because they chose to cancel. Their card expired, was replaced after fraud, or was momentarily short of funds. They usually still want the product.
What recovery rate is realistic?
It depends on your failure mix, but moving from passive retries to card-updater services, timed retry logic and pre-expiry prompts typically produces a substantial improvement. Rates approaching 100% are not achievable — some failures are permanent.
Why measure lifetime value rather than the failed charge?
Because losing one 65 payment is trivial and losing a customer who would have paid 65 a month for another two years is not. The failed charge is the trigger; the lifetime value is the loss.
Does anything I type get sent anywhere?
No. The whole calculation runs in your browser. Nothing is transmitted, stored, or logged, and there is no account to create.

Last updated .

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