Cheat sheet

10 dunning best practices

How to improve subscription renewal rates and reduce customer churn

In the vibrant landscape of subscription services, managing a timely, effective dunning strategy could be the difference between dwindling revenue and a loyal, ever-growing customer base. 

53% of total churn is involuntary due to failed payments–here’s where smart dunning comes into play. Yet, despite the critical role of dunning in subscription management, many businesses overlook this pivotal process and employ half-hearted approaches that undermine its potential.  

No more. Here are 10 best practices that can transform your approach to subscription renewals and supercharge your subscription revenue recovery. Recurly merchants have applied these proven tips and got a 12% revenue lift in the first three months of launch

1. Consistency is key: Build branding across every touchpoint

The first rule of dunning is the message: keep it on-brand. Generic or inconsistent messaging can lead to customer confusion and a less effective dunning campaign.

Your dunning notifications should be immediately recognizable as coming from your business, with consistent tones, visuals, and overall branding that aligns with your company's image and values. This continuity reinforces your brand's identity and ensures a seamless subscriber experience.

2. It’s all about timing: Plan your email cadence

Timing is everything in dunning. Bombarding with too many email reminders can lead to subscription fatigue and potentially alienate your customers.

Plan your emails carefully, spacing them apart to avoid overwhelming your subscribers. A widely accepted practice is to send three to four messages over a 28-day period, giving just enough time for the subscriber to appreciate the reminders without seeing them as intrusive.

3. Change the tune: Leverage different messaging styles

Each dunning email is a chance to engage your subscribers differently. Repeating the same message in every dunning email can make your communications feel stale and automated.

Leverage varying tones and messages in each email to keep the communication fresh and interesting. An irritated customer who ignored the first email might respond better to a polite, apologetic second message. Be adaptable and empathetic in your approach.

4. The clearer, the better: Optimize your renewal call to action

Your call-to-action (CTA) to update billing information should guide your customer's next step with precision. It must be clear, prominent, and easy to follow. Vague or multipurpose CTAs can lead to subscriber frustration and inaction, leading to a drop-off in engagement.

5. Beyond the payment: Provide alternative CTAs

Sometimes, customers need assistance beyond just updating their billing info. Focusing solely on the transaction can result in missed opportunities to solve broader subscriber issues and build loyalty.

Include alternative CTAs in your dunning emails that link to your FAQs page, customer support, community boards, or social media channels. This provides a safety net for customers unsure about their next steps, and it also encourages engagement beyond the payment conversation.

6. Convey urgency: Craft compelling subject lines 

Subject lines can make or break your dunning emails. Bland or overly aggressive subject lines can lead to emails being overlooked or marked as spam. 

Express an increasing sense of urgency with each message, without resorting to scare tactics. Phrases like "action required", "time is running out", or "last notice" can effectively prompt your customers to take immediate action.

7. Countdown to consequence: Provide clear timelines

In each dunning email, inform the customer of the exact number of days until their account will be suspended or closed. This transparent countdown persuades subscribers to act quickly and removes any ambiguity about the consequences of inaction. Failing to set clear expectations on timelines can lead to misunderstandings and subscriber dissatisfaction.

8. The magic of segmentation: Define campaigns for cohort audiences

Not all subscribers are equal. A one-size-fits-all dunning strategy can overlook the varied needs and responses of different consumer groups. Tailoring your approach to specific audiences can result in higher engagement and conversion rates.

Consider running multiple dunning campaigns simultaneously, targeting different customer segments based on factors like subscription tier, account history, or user behavior. 

9. Champion your value: Remind subscribers why they chose you

Focusing only on the payment issue can neglect the opportunity to reinforce your product’s value proposition. Don't forget why your customers subscribed in the first place.

Remind them of the value your service brings to their lives, and the benefits they'll continue enjoying once the payment decline issue is resolved. This positive reinforcement strengthens the customer-business relationship.

10. Speak their language: Use account-level messaging

Personalization goes a long way in dunning. Impersonal mass emails can erode the customer's sense of importance and value in the business relationship. Make sure to use account-level language and specifics to address your customers directly. 

Mention their subscription details, the services they use, and any other personalized information to show that the communication isn't just another automated response but a genuine invitation to keep their subscription.

Dunning done right: Get your copy of the cheat sheet

Dunning is not just about chasing overdue payments—it's about creating an effective communication strategy that reinforces the value of your service. By implementing these best practices, you can recover more revenue, reduce customer churn, and re-engage with subscribers to build long-term loyalty.

Take hold of these dunning best practices. Download a copy to keep it handy at any time.

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