Recurly software decreases involuntary churn by using credit card updates and automatic retries to recover revenue without intervention by merchants or customers. Recurly recovers an average of 7% of your customer revenue with automatic card updates and automatic retries.

If these efforts don’t pay off, the software starts to send dunning emails to your customer on a schedule you set. Customer updates–mostly from dunning–add an average of 2.5% in further recovered revenue.

Here’s how to customize your dunning emails so you can recover more revenue and prevent customer churn.

Seven things to add to your dunning letter

The dunning email templates that Recurly provides are strong on facts but are not yet customized to fit the needs of your business. Consider adding the following seven items to create customized emails:

Your company letterhead and logo. Create an attractive design with your letterhead and logo. Good design builds trust and shows that the email isn’t spam.

  1. Your tone: Use your company’s “voice” and branding messages.

  2. Special offers: Include a special offer to keep customers who are wavering.

  3. Next steps: Add the date you need customer action by and what the next step is.

  4. A link for self-updating: There’s a parameter in Recurly’s email templates for a link to the customer’s account information page, where they can provide new billing information directly. This parameter is already included in Recurly's dunning email templates. Include this link in your emails.

  5. Contact information: Use a From email address that customers can reply to. Give customers a phone number to call and a link to an email address they can write to.

  6. Signature: Send the dunning email from a specific person in your company. Include that person's name, title, and a graphic image of their signature in the email.

Keep it short and positive

Keeping a positive relationship with customers is just as important as actually collecting past-due amounts. This is even more important for subscription billing businesses because the cost of losing a single month’s payment is much less than the lifetime value (LTV) of the customer relationship.

So keep the tone of the dunning email positive. Focus on what the customer will get by continuing the relationship. 

Besides being positive, successful collection letters are also short and to the point, especially when you use email. Research shows it’s harder for people to read onscreen than on paper, so be concise. Here are the key facts to include:

  • Acknowledgment that payment may have already been made separately

  • The invoice date

  • The amount due

  • The payment due date

  • How to pay

  • Contact information

  • What happens next

Why it matters

Improving your dunning cycle–both the timing and the content–can be a big boost to your business:

  • Successful dunning recovers revenue: As I mentioned above, Recurly recovers an average of 7% of your customer revenue before dunning - and customer updates, mostly from dunning, add an average of 2.5% in further recovered revenue.

  • Successful dunning reduces involuntary churn: When you “save” a customer after a card decline, you recover more than just that month’s revenue; you keep the rest of that customer’s LTV too. (See this example of high vs. low churn, using data from two anonymous Recurly customers.)

  • Positive dunning emails improve word of mouth: Payment failures are frustrating for your customer. If you handle it well, the customer is likely to say better things about you–to friends, colleagues, and social media connections. 

Changing dunning email content in Recurly

If you’re a Recurly customer, follow these steps to change dunning email content:

  • In the Recurly web app, navigate to your Email Templates page.

  • Next to Payment declined, click Customize. The Payment declined template appears.

  • Next to Settings, click Edit. Change the settings for the From email address. Add any cc or bcc email addresses you wish to include.

  • Next to Plain-text Body or HTML Body, click Edit.

  • Edit the text and HTML versions. Include Recurly-supported parameters.

  • Click Update Email Template. You return to the Payment declined templates page.

  • Next to HTML Body, click View. A preview of the HTML version appears, as shown in the figure. Examine the preview carefully for appearance, typos, content, and tone.

  • Continue editing both versions until you’re satisfied.

Pro tip: Bcc dunning emails to an email address in your company so you can double-check them. 

In our final post in this series, we’ll describe how to test and measure the effectiveness of your recovered revenue efforts.