What is Voluntary Churn?

Voluntary churn happens when a customer actively chooses to cancel your service. Maybe your product didn’t deliver value. Maybe they found a better (or cheaper) alternative. Or maybe they simply outgrew the need.

Common causes of voluntary churn:

• Poor onboarding or engagement

• Lack of product-market fit

• Pricing concerns

• Strong competition

• Weak customer support or service

In other words, this type of churn is feedback. It tells you where your product or customer experience might be falling short. The good news? It’s in your control. With better onboarding, clearer value messaging, stronger support, and more personalized experiences, you can reduce voluntary churn.

What is Involuntary Churn?

Involuntary churn, on the other hand, is when a customer doesn’t mean to cancel—but does anyway. Usually, this happens because of payment failures: expired credit cards, insufficient funds, or transaction errors.

Common causes of involuntary churn:

• Expired or replaced credit cards

• Maxed-out limits

• Bank declines or fraud flags

• Technical issues in billing systems

These customers often don’t even realize they’ve churned—until they lose access and decide not to come back. That’s money walking out the door, not because your product didn’t deliver, but because your billing system dropped the ball.

Why It Matters: The Hidden Impact of Involuntary Churn

Most teams obsess over voluntary churn—surveys, NPS scores, engagement metrics. But many completely overlook involuntary churn, even though it can account for 20–40% of total churn in a subscription business.

Think about that. Nearly half of your lost revenue might not be from unhappy customers, but from failed payment flows.

That’s why smart companies are investing in payment recovery automation—AI-powered retries, card updater services, alternative payment methods, and pre-dunning emails that prevent failures before they happen.

How to Reduce Both Types of Churn

For voluntary churn:

• Improve onboarding to help users reach value faster

• Regularly check in with customers (CSMs, surveys, etc.)

• Offer flexible pricing and contract options

• Use product analytics to detect disengagement early

• Deliver real outcomes, not just features

For involuntary churn:

• Use smart dunning tools that retry payments intelligently

• Automatically update expired cards with account updater services

• Notify users before their payment method expires

• Let customers add multiple payment methods

• Monitor billing systems for failure trends

The Cost of Involuntary Churn

Failed payments can quickly snowball into lost revenue, increased customer acquisition costs, and reduced customer lifetime value (CLV). Studies show that 20-40% of churn for subscription-based businesses is involuntary. For a company generating millions in annual recurring revenue (ARR), even a small percentage of involuntary churn can result in hundreds of thousands of dollars in losses.

Beyond financial impact, involuntary churn can harm your brand’s reputation. Customers who lose access to a service due to payment failures may feel frustrated, leading to negative reviews and decreased loyalty.

Bottom Line: Don’t Leave Money on the Table

If you only focus on voluntary churn, you're missing half the picture. Your product team may be doing everything right, but if your payment systems aren’t optimized, you’re still bleeding revenue.

The best retention strategy combines customer success with payment success.

Want to plug the leaks? Start by identifying how much of your churn is voluntary vs. involuntary. From there, you can tailor your strategy, align your teams, and start winning back revenue you didn’t even know you were losing.

Need help reducing involuntary churn? Let’s talk about how smart payment recovery tools can boost your bottom line.