Economic Headwinds Force Hard Look at What Drives Customer Value, Says FlexPay COO

PYMNTS asked business leaders for their take on how to plan for the rest of 2023 and what they are telling their teams to focus on. Trevor Murphy, COO and co-founder of payment authorization management platform FlexPay, says opportunities still exist despite market headwinds and economic uncertainty — businesses just have to know where to look.

The expectations that economic headwinds are growing have crystallized. The combination of customer acquisition slowing down for our customers, worrisome trends in spending levels by both businesses and consumers and of course, the recent uncertainty in the banking system are all negative pressures on our growth and market outlook.

We are actively working with our teams to increase the operational efficiency of our businesses. We are intent on driving more output from our operations and driving better results from our GTM and customer success teams.

The positive side, however, is that we know our customers are also focused on finding efficiencies to increase profitability in order to offset slowing growth. So, while the current environment is forcing us to look inward to improve our efficiency, this also creates new opportunities for us as our value proposition is acutely aligned with the market’s current focus on increasing revenue and profits from existing operations.

For example, with cancellations outpacing new signups since the fourth quarter of 2022, subscription providers need to have processes in place to prevent the loss of subscribers and improve retention. Issues that are fixable problems, like failed payments, can cause churn and ultimately, business inefficiencies.

The March study “Tracking Failed Payments,” a PYMNTS and FlexPay collaboration, found that “The impact of failed payments on revenue in the subscription industry is substantial and underappreciated,” adding that subscription merchants lose an estimated 9% of revenue to failed payments, with health and fitness hardest hit, and gaming faring better than most.