How to Configure Automated Churn Rules

Churn is universally understood to be when a subscriber has discontinued their subscription services. This generally happens in one of two ways: 

1. Active Churn: Active churn is when a customer churns on purpose; they took the necessary steps to cancel their subscription or services with the company.
2. Passive Churn: Passive churn is when a customer churns, but they did not take active steps to do so. It is the inevitable result of failed payments and poor communication. Passive churn can occur due to a billing problem, such as an expired credit card, which causes the customer to stop paying for a subscription service. Passive churn is also known as involuntary churn because customers aren’t cancelling their subscription deliberately.

Every organization and product therein, has unique business rules and regulations when it comes to what defines a customer as churned, and what steps should be taken when churn occurs. 

The Churn Rule Management feature allows users to create unique rules on pAIment, to cater for the business rules required for the collection of the unpaid funds and arrear values on a customer’s account. Through this feature, these configured rules can be implemented automatically by pAIment when a customer churns.

What is a Churn Rule? 

A Churn Rule can be understood as: the customer status criteria that is required to categorize said customer as churned by the business; 

As well as: the actions and/or steps that must be implemented in billing systems when a customer has been categorized as churned. 

How to Configure a Churn Rule

Configuring and implementing churn rules within your billing strategy is a big step towards achieving completely automated billing operations.

2. Name and describe your Churn Rule:

3. Configure the rules that will define your Churn Rule:

4. Once you have configured your Churn Rules, remember to save your event before leaving this page.

You can view a list of all churn rules that have been configured within your organization when you navigate back to Configuration > Churn Management using the lefthand side Menu. 

Here, you are able to activate/deactivation, or amend and save existing Churn Rules. 

Process Flows 

Status Definitions 

Status	Definition
Awaiting Collection	The platform prepares the debit order collections file aligned to the configured days before a debit order collection date. This configuration is done per Organization.   Examples of this:  Business A runs their Invoicing process 5 days before the Debit order Collection date for a customer.     The Awaiting collection process is the first step once an invoice is created, and the collection file is sent to the bank.   At this point the:   Invoice Status = Now Due   Subscription Status = Awaiting Collection.
Active	The active outcomes occur at multiple points in the invoicing and collections flow. These are as follows:     1. When the first invoice of a subscription is created an update of the Invoice and Subscription Status occurs. These are:   Invoice Status = Created   Subscription Status = Active    2. The Active outcome is the positive scenario of a subscription when a customer’s debit order is successfully collected. At these points the statuses updates as follows:  Invoice Status = Paid  Subscription Status = Active  3. During any negative scenarios such as Dispute and Suspend, there are 2 outcomes dependent on the business retentions processes, with the Active result being the positive result.   Invoice Status = Now Due   Subscription Status = Active    4. The final outcome where the Subscription remains active but is in fact a negative customer payment scenario is when the customer debit order is Unpaid but the subscription remains active.   Invoice Status = Unpaid  Subscription Status = Active
Disputed	The dispute outcome is triggered by the response file from the bank after a collections file is sent.  paiment currently only has two banks which are the sponsoring banks for the collection services. Based on the following reason codes a Subscription is seen as Disputed     At the receipt of any of the above codes the following status updates occur:  Invoice Status = Suspended  Subscription Status = Dispute
Suspend	The suspend outcome is triggered by the response file from the bank after a collections file is sent. pAIment currently only has 2 banks which are the sponsoring banks for the collection services. Based on the following reason codes a Subscription is seen as Suspend:     At the receipt of any of the above codes the following status updates occur:  Invoice Status = Unpaid  Subscription Status = Suspend
Cancel	The Cancel outcomes occur at multiple points in the invoicing and collections flow. These are as follows:     The Cancel outcome is the negative scenario of a business retentions process through either the Disputed or Suspend reason codes being triggered on the platform.  For either the Cancel result after a call with the client can result in:   Dispute Triggers   Invoice Status = Reversed    Subscription Status = Cancel   Suspend Triggers  Invoice Status = Unpaid  Subscription Status = Cancel    During any point in a customer’s journey the option for cancellation is available.   This will result in the following:   Invoice Status = as of last invoice update.   Subscription Status = Cancel
Default	The Default outcomes occurs directly because of the customers payment and the arrears age of a customer’s subscription. This will be dependent on an Organisation but for the default flow this will be set at 31 Days in Arrears. Arrears occurs on an account when an insufficient funds reason code is receipted.   The reasons codes are:    The Default outcome results in the following status changes:  Invoice Status = Unpaid    Subscription Status = Default