Table of Content

• What is dunning in subscription management?
• What is the difference between dunning and bill collection?
• When is dunning an effective strategy?
• Make payment retry plans better
  • Think about these things
  • Use data to help
  • Talk to customers
• Talk to customers before payments are due
• Make good dunning emails
  • Tell customers why you're emailing
  • Give ways to pay
  • Set a due date
  • Make the email personal
• Use many ways to talk to customers
  • Use email, text messages, and app alerts
  • Make messages personal
• Give customers more ways to pay
• Use account updater services
• Group customers for better payment recovery
• Make it easy for customers to update their payment info
  • Give customers quick ways to update
  • Why this helps
  • Use in-App reminders
• Check and improve your dunning process
  • Look at important numbers
  • Find ways to get better
  • Make changes
  • Ask customers what they think

What is dunning in subscription management?

Dunning is the process of systematically handling failed or overdue payments in subscription-based businesses. It typically involves automated reminders, retrying payments, and follow-ups to recover lost revenue due to payment issues like card declines or insufficient funds.

An effective dunning strategy includes automated retry attempts, personalized reminders, and offering alternative payment methods. This helps minimize involuntary churn, ensures a smooth payment experience, and ultimately improves customer retention.

By implementing a strong dunning process, subscription businesses can reduce revenue loss and maintain healthier relationships with their customers.

What is the difference between dunning and bill collection?

Comparation	Dunning	Bill collection
Stage	Early	Late
Approach	Gentle reminders	More forceful
Actions	Sending emails, texts	Legal action, debt collectors
Goal	Get payment quickly	Recover unpaid debts

When is dunning an effective strategy?

Dunning works well for:

• SaaS companies

• Businesses that rely on regular payments

It helps companies:

• Keep money coming in steadily

• Stop losing money

• Keep customers from leaving

A good dunning system can:

• Get back more money

• Make customers happier

Want to boost your subscription income and keep customers? Here's how to improve your dunning management:

Strategy	Key Benefit
Retry plans	Recover more failed payments
Pre-dunning	Prevent payment failures
Effective emails	Increase payment recovery rates
Multi-channel	Reach more customers
Payment options	Reduce declined transactions
Account updaters	Keep billing info current
Segmentation	Tailor recovery approaches
Easy updates	Maintain accurate payment data
Monitoring	Continuously improve process

By implementing these tactics, you'll minimize revenue loss, retain more subscribers, and maximize your recurring income.

Make payment retry plans better

When a payment fails, having a good plan to try again is key. This helps get back lost money and keep customers. Here's how to make your retry plans work better:

Think about these things

• Why the payment failed

• When to try again

• How often to try

For example, if there's not enough money in an account, wait a few days before trying again. Also, try at times when people are less busy.

Use data to help

Look at how customers usually pay and when. This can help you figure out the best times to try again for each customer.

Talk to customers

Let customers know when a payment didn't work and when you'll try again. This helps keep them happy and stops them from leaving by accident.

Ways to improve payment retries
Wait a few days if not enough money
Try during less busy times
Use customer payment history
Send notices about failed payments

By making these changes, you can:

• Get back more failed payments

• Lose less money

• Keep customers happy

Talk to customers before payments are due

Talking to customers before their payments are due can help stop payment problems and keep customers. This is called pre-dunning communication. It means reaching out to remind customers about upcoming payments and making sure they have enough money.

By sending friendly reminders, you can:

• Lower the chance of payment failures

• Give customers a chance to update their payment info

• Build trust with customers

• Show that you care about their experience

Here's how to talk to customers before payments:

Strategy	Description
Watch customer habits	Look at how customers buy and use your service to spot possible issues early
Group customers	Put customers into different groups based on how they act or what they like
Make messages personal	Use customer info to make your messages feel more personal
Guess possible problems	Use customer data to predict issues, like reminding customers who often cancel at the last minute

Make good dunning emails

Good dunning emails are key to getting back failed payments and keeping customers. Here's how to make them work well:

Tell customers why you're emailing

Make sure the subject line and email clearly say why you're writing. Be polite and don't use harsh words. Just let them know about the payment issue.

Give ways to pay

Add a link or button that takes customers to a safe payment page. This makes it easy for them to pay what they owe. You can also tell them other ways to pay, like with credit or debit cards.

Set a due date

Give a clear date for when the payment is due. This helps customers act quickly. It can also help you get more payments on time.

Make the email personal

Use the customer's name in the email. You can also add some billing details, like their billing address. But be careful not to share personal info in team emails. This personal touch helps build trust.

Email Part	What to Do
Subject line	Say clearly why you're emailing
Email body	Be polite, explain the issue
Payment options	Add a link to pay, list other ways
Due date	Set a clear deadline
Personal touch	Use customer's name, add some billing details

By following these tips, you can:

• Get more failed payments back

• Keep customers happy

• Build better relationships with customers

Use many ways to talk to customers

Talking to customers in different ways helps get payments on time. This makes it easier for customers to pay and keeps them happy.

Use email, text messages, and app alerts

Talk to customers in ways they like:

Method	How it helps
Email	Send clear messages with easy-to-follow steps
Text messages	Quick way to tell customers about urgent issues
App alerts	Remind customers on their phones and guide them to pay

Make messages personal

Make each message fit the customer:

• Use the customer's name

• Talk about their specific plan

• Give clear steps to fix payment problems

Change your messages for different groups of customers. This helps you talk to them in the best way.

Ways to make messages personal
Use customer's name
Mention their plan details
Give clear payment instructions
Change messages for different customer groups

By using these tips, you can:

• Reach more customers

• Get more payments on time

• Keep customers happy

Give customers more ways to pay

Giving customers more ways to pay helps stop payment problems and keeps them happy. When you offer different payment options, more customers can pay easily. This is really important if you have customers in different countries, as people like to pay in different ways depending on where they live.

Here's a look at popular payment methods in different places:

Region	Popular payment methods
United States	Debit cards, credit cards
Europe	Bank transfers, electronic funds transfers (EFTs)
Asia	Digital wallets, bank transfers

By offering these different ways to pay, you can:

• Lower the chance of payments not going through

• Make paying easier for customers

• Keep customers happy

It's also good to let customers choose how often they pay. Some might want to pay every month, while others prefer every three months or once a year. This can make customers happier and more likely to stay with you.

Billing options	How it helps
Monthly	Good for people who like to budget month by month
Every three months	Might be easier for some to manage
Yearly	Can be cheaper overall for customers

By giving customers more ways to pay and letting them choose when to pay, you can:

• Get more payments on time

• Keep customers longer

• Make more money over time

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Use account updater services

Account updater services help keep customer payment info up to date. This is good for getting more money from subscriptions. Here's how they work:

• They update stored credit card details automatically

• This happens when customers get new cards due to:

  • Old cards expiring

  • Cards being stolen

  • Fraud issues

  • Card upgrades

Using these services means:

• Customers don't have to update their card info themselves

• Payments keep going through without problems

• Fewer customers leave by accident

Benefits of account updater services
Keep payment info current
Fewer failed payments
Customers stay longer
More steady income

To use account updater services well:

1. Pick a good service that works with many credit card companies

2. Make sure it fits with your current payment system

3. Set it up to run automatically

By doing this, you can:

• Make paying easier for customers

• Keep more customers

• Get more money from subscriptions

Group customers for better payment recovery

Grouping customers helps you get more payments back. It lets you talk to each group in the best way. Here's how to do it:

1. Split customers into groups based on:

   • How they pay

   • How likely they are to miss payments

   • How much they spend

2. Make different plans for each group

Here are four main customer groups:

Group	Description	How to handle
Pay on time, spend a lot	Important customers who usually pay	Send personal reminders, offer more ways to pay
Pay on time, spend less	Good customers, but not top spenders	Use automatic emails with clear payment steps
Often late, spend a lot	Important, but risky customers	Have a person talk to them, offer payment plans
Often late, spend less	Highest risk customers	Send many reminders, call them

By grouping customers, you can:

• Get more payments back

• Keep more customers

• Make customers happier

• Save time and money on getting payments

Make it easy for customers to update their payment info

Letting customers easily update their billing details helps get more money from subscriptions. Here's how to do it:

Give customers quick ways to update

Let customers update their info in just a few clicks. This makes it more likely they'll keep their details current.

Where to update	How it works
Email	Click a link to go straight to a payment form
In your app	Show a form right away for updating details

Why this helps

Making updates easy:

• Stops customers from ignoring payment reminders

• Gets more failed payments fixed

• Saves time on customer support

Use in-app reminders

Show pop-ups in your app to remind customers to update their info:

• When they log in, ask them to update

• If they don't update, it might mean:

  • They're not using your app (not good)

  • They might want to cancel soon

By making updates simple, you can:

• Fix more failed payments

• Keep more customers

• Spend less time chasing payments

Check and improve your dunning process

To get more money from subscriptions, it's important to check how well your dunning process works and make it better. Here's how:

Look at important numbers

Keep track of these numbers to see how well your dunning emails are doing:

Number to track	What it means
Open rate	How many people open your emails
Click rate	How many people click links in your emails
Success rate	How many people pay after getting your emails

Find ways to get better

Use these numbers to see where you can do better. For example, if not many people are opening your emails, you might need to change your subject lines.

Make changes

Based on what you learn, change your dunning process. You might:

• Change what your emails say

• Send emails at different times

• Try sending texts or making phone calls instead of emails

Ask customers what they think

Talk to customers to find out what they think about your dunning process. This can help you make it better.

Ways to get customer feedback
Send short surveys
Ask for comments after payments
Look at customer service calls

Using good dunning management helps businesses make more money from subscriptions and keep customers. By using the nine ways we talked about, you can:

• Get more payments that didn't go through at first

• Make customers happier

• Earn more money

It's important to look at dunning management as a whole. It's not just about sending emails or making calls. It's about:

• Understanding what customers need

• Talking to them well

• Making it easy for them to pay

Here's a quick look at what you can do:

What to do	How it helps
Try to get payments again in smart ways	Fewer missed payments
Talk to customers before payments are due	Customers are ready to pay
Use emails, texts, and app messages	Reach more customers
Give different ways to pay	Make it easier for customers
Keep payment info up to date	Fewer problems with payments
Group customers	Talk to each group in the best way
Make it easy to update payment info	Get more payments fixed
Check how well you're doing	Find ways to get better

Remember to look at how well your dunning is working and ask customers what they think. This helps you make it better over time.

By doing these things, you can:

• Keep more customers

• Make customers happier

• Get more money from subscriptions