Dunning done right: 12% subscription revenue lift with Recurly

How smart dunning can improve customer retention in only three months

Subscription-based business models have been gaining popularity due to their ability to create predictable revenue streams. However, maintaining this stream comes with the persistent challenge of managing payment failures.

From streaming and digital media to SaaS companies, involuntary churn is a revenue-eating enemy directly impacting subscription growth. As part of Recurly’s Customer Success program, we offered 20 merchants a one-on-one, customized dunning workshop.

In these sessions, our team led an exhaustive review of their existing revenue recovery strategy and shared relevant dunning best practices they could apply quickly to see improved results.

Customized dunning: The first step to success

Dunning is the process of communicating with subscribers to resolve any payment issues promptly. It’s more than just billing—it’s a delicate art between retaining customers and building brand loyalty without being intrusive.

However, poorly managed dunning can lead to significant revenue losses over time. And so, we pose the question: Are you doing everything possible to maximize your dunning process? 

Strategy optimization: A tailored approach

There are several elements to consider while building the right dunning strategy: the total amount of emails, their design, and the retry model schedule. 

Our Customer Success team re-evaluated their dunning process and suggested more structured and timely payment failure notifications, with a focus on integrating customer data with payment information to deliver contextual messages and personalized experiences:

  • SmallPDF enhanced its branding on email design and messaging through the different sets of emails, updated its dunning window, and optimized the frequency of communications.

  • Overleaf extended its dunning window by 13 days and added additional email communications to remind consumers of the value it provides

  • Kahoot! modified and extended its dunning window length to adjust its communication frequency and leave more days between each message.

The results? A significant increase in dunning effectiveness in the first three months of implementation.

The power of proactive and smart dunning campaigns

The improvements went beyond financial metrics. Three months after implementation, this group of customers saw an outstanding uplift in dunning effectiveness and additional revenue.

When handled with care and intentionality, dunning can be a powerful tool in customer retention and revenue optimization. Working with Recurly, a subscription management and recurring billing partner involved in your business's intricacies, is key to serving the necessary optimizations to maximize your current processes.

By investing in strategic dunning practices and leveraging customer data, brands can turn a potentially negative interaction into a touchpoint that builds trust and enhances the customer experience.

Subscription dunning is more than a process of financial recovery; it’s an opportunity to engage with customers and demonstrate a commitment to their satisfaction. And these results exemplify how a focused approach to dunning communication can yield spectacular results. We pride ourselves on partnership, making sure we evaluate your exact needs to provide tailored solutions for effective results.

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