It started with a Slack message at 2 AM. A customer success manager noticed that a high-value enterprise account had been downgraded to the free tier. The customer had not requested the change. There was no support ticket, no cancellation survey, no competitive loss report. What happened was far simpler and far more frustrating: a corporate credit card had expired, the payment failed three times with exponential backoff, and after 10 days the system automatically suspended the account. The customer never knew their payment had failed. We never knew we had a problem.
When we dug into the data, we found that this was not an isolated incident. Over the previous quarter, 847 payment failures had occurred across our customer base. Of those, 312 were never recovered. That represented $186,000 in lost revenue and an estimated $2.2 million in lost lifetime value. We had been so focused on product-led retention and reducing voluntary churn that we had completely ignored the revenue quietly leaking out through failed payments.
The Problem with Existing Solutions
We started by evaluating every payment recovery tool on the market. What we found was a landscape of expensive, opaque, and narrowly focused products. Some handled smart retries but had no cancel flow interception. Others had great dunning emails but no ability to retry payments at optimal times. Nearly all of them were Stripe-only, charged opaque percentage-of-recovery fees, and offered no visibility into how their algorithms actually worked.
The most frustrating part was the pricing. Many tools charged 5 to 15 percent of recovered revenue as their fee. For a company recovering $50,000 per month, that meant paying $2,500 to $7,500 monthly for what is essentially a retry scheduler and email sender. The value is real, but the margin felt wrong. We believed this could be done with transparent, flat-rate pricing that scales with the merchant rather than eating into their recovered revenue.
What We Decided to Build
LostChurn was built on three principles. First, recovery should be invisible to the end customer whenever possible. Smart retry timing based on decline code analysis means most failed payments are recovered silently, without the customer ever receiving a dunning email. Second, prevention is better than recovery. Pre-dunning alerts that notify customers before their card expires eliminate a large category of failures entirely. Third, pricing should be transparent and predictable. We charge flat monthly rates plus a small recovery fee that is a fraction of what incumbents charge.
We also made a technical decision that shaped the entire product: we built on SpacetimeDB, a database that runs server logic inside the data layer. This means every recovery action, retry decision, and campaign step executes with zero network round trips to the data. It gives us the real-time performance needed to retry payments at exactly the right moment, not just approximately the right hour.
Where We Are Today
LostChurn now classifies over 50 distinct decline codes, runs AI-scored recovery strategies, supports multi-channel dunning campaigns, and provides a visual campaign builder for custom recovery flows. We support Stripe with Braintree and Shopify integrations in development. Our dashboard shows every merchant exactly what is happening with their failed payments in real-time, with full attribution on which recovery strategy worked and why.
If you are losing revenue to failed payments and want a transparent, AI-powered solution that actually shows you how it works, we built LostChurn for you.