Dunning: How to Reduce Involuntary Customer Churn and Increase Customer Retention

Increasing customer retention can increase profits by 25%. It is much easier to retain old customers than convince new customers to use your services. That’s why it’s important to retain those customers you may be losing to failed payments. There are several strategies to limit involuntary churn, including:
Written By:
Alyssa Lowery

Reducing your involuntary customer churn rate and increasing customer retention are essential for increasing the health of your subscription business. Why? Involuntary customer churn occurs when a customer experiences a failed payment due to incorrect or expired billing information, insufficient funds, lost or stolen card, and more. 


Increasing customer retention can increase profits by 25%. It is much easier to retain old customers than convince new customers to use your services. That’s why it’s important to retain those customers you may be losing to failed payments. There are several strategies to limit involuntary churn, including:

Avoid Pre-Dunning

Before you facilitate your dunning process, there is pre-dunning. Pre-dunning is the process of warning a customer that their payment needs to be made or that their card is expiring. Now, over 70% of cards today get updated without having to contact anyone. Companies will work with banks directly to update expiring card information. Because of that, you don’t need to send a pre-dunning email to alert your customer. 


Let the card updates happen seamlessly, and your customers’ subscriptions and recurring payments will not be skipped. You can always alert your customers of a recurring payment with a friendly email reminder if you wish, but there is no need to alert them of their card expiring. 

Make Updating Card Info Easy

Using automatic recurring payments is meant to be convenient and mindless. Without a customer ever having to touch their computer, pull out their credit card, or even worry about remembering, their payment goes through.


Except, credit card changes happen… so customers may eventually have to update their billing information. When this happens, the process should be easy and seamless for customers. 


Create a dedicated page for card updates. This page should be easy to find in their user profile near their current billing information.


Make sure that your card update page is mobile-friendly. Many people check their email on their phone and will expect to easily update their card on their mobile device as well.

Personalize Emails


One way to personalize your emails and ensure that your customers will trust you is with consistent branding. Set up your emails with your logo on top. (Need a new logo? Check out this free logo maker!) Maintain the fonts and colors you use in your emails throughout marketing and transactional emails… and use an email signature. Now, more than ever, there are tons of phishing and scams out there. Making your branding consistent will help ensure that your customers know that it’s you and not someone trying to scam them for money when you need to reach out about failed payments.


Next, be sure to have a dedicated, consistent email address — something simple like support@graysolution.io. This way, your customers will see the same email address every time they need to interact with your customer service team and know they can trust clicking on the email. 


Also, do not stray from the way you convey your messaging. If your company is fun and witty, keep with this messaging in your email. If your company has a more serious tone, then go with that. But, be sure to change the copy as the customer gets closer to cancellation if their payment is not processed. You want to let them know you want them around, and they must take care of their card updates as soon as possible, but in various ways along the email journey. Be sure also to limit the number of links that are in your emails. One or two buttons should suffice. The most crucial button should be to update their payment information. 


Make sure there is a person dedicated to replying to your dunning emails. Having a dedicated person to respond to emails ensures trust in your customers to know they can reach an actual person if a problem arises through their card update process.

Minimize Automation

Automation is a fantastic tool. It’s incredibly helpful for sending emails based on what customers have clicked on your website, or based on whether or not they opened an email. 


An automated email can even come in handy when collecting failed payments and serve as a friendly reminder to update your card information. But, sometimes, our emails go by the wayside, and customers don’t open them or interact in any way. 


You may have to change how you contact these specific customers. One way is to send these particular customers an extremely personalized email based on their unique billing issue. A team of revenue recovery specialists can easily asses unique failed payments with customers.


Using real people to contact customers who have lapsed due to failed payments will allow these customer service agents to work through any questions or concerns your customer may be having while encouraging them to continue the use of your service.


Human-to-human communication will always offer much more value to your customers than automation ever will.

Avoid Over-Sending Emails

Sending too many emails can fatigue and frustrate your customers. That’s why every email needs to be sent with intention.


It can be easy to want to react quickly when a failed payment occurs… but be sure to try processing the payment multiple times before reaching out to contact the customer to ensure this isn’t an error of your payment processor. 


If you’ve attempted to process the payment a few times with no luck and no issues with your own processor, it’s time to send the customer a personalized email.


Always use empathy when communicating with your customers, and be sure not to place blame or be too pushy when sending emails to failed payment customers. 


These types of processing issues require tact and patience. While retrieving failed payments can require multiple emails, know when it’s time to call it quits.


By avoiding annoying your customers, they’ll be more likely to return to your business in the future.

Conclusion


Involuntary customer churn is a natural part of owning a business; it will happen. However, by using dunning best-practices and recognizing that behind every failed payment is a customer, you can more successfully retrieve lost revenue from involuntary churn and improve customer retention.


If you don’t have the resources or want professionals handling failed payments for your company, Gravy is here to help. Get Your Free Proposal Today


Reducing your involuntary customer churn rate and increasing customer retention are essential for increasing the health of your subscription business. Why? Involuntary customer churn occurs when a customer experiences a failed payment due to incorrect or expired billing information, insufficient funds, lost or stolen card, and more. 


Increasing customer retention can increase profits by 25%. It is much easier to retain old customers than convince new customers to use your services. That’s why it’s important to retain those customers you may be losing to failed payments. There are several strategies to limit involuntary churn, including:

Avoid Pre-Dunning

Before you facilitate your dunning process, there is pre-dunning. Pre-dunning is the process of warning a customer that their payment needs to be made or that their card is expiring. Now, over 70% of cards today get updated without having to contact anyone. Companies will work with banks directly to update expiring card information. Because of that, you don’t need to send a pre-dunning email to alert your customer. 


Let the card updates happen seamlessly, and your customers’ subscriptions and recurring payments will not be skipped. You can always alert your customers of a recurring payment with a friendly email reminder if you wish, but there is no need to alert them of their card expiring. 

Make Updating Card Info Easy

Using automatic recurring payments is meant to be convenient and mindless. Without a customer ever having to touch their computer, pull out their credit card, or even worry about remembering, their payment goes through.


Except, credit card changes happen… so customers may eventually have to update their billing information. When this happens, the process should be easy and seamless for customers. 


Create a dedicated page for card updates. This page should be easy to find in their user profile near their current billing information.


Make sure that your card update page is mobile-friendly. Many people check their email on their phone and will expect to easily update their card on their mobile device as well.

Personalize Emails


One way to personalize your emails and ensure that your customers will trust you is with consistent branding. Set up your emails with your logo on top. (Need a new logo? Check out this free logo maker!) Maintain the fonts and colors you use in your emails throughout marketing and transactional emails… and use an email signature. Now, more than ever, there are tons of phishing and scams out there. Making your branding consistent will help ensure that your customers know that it’s you and not someone trying to scam them for money when you need to reach out about failed payments.


Next, be sure to have a dedicated, consistent email address — something simple like support@graysolution.io. This way, your customers will see the same email address every time they need to interact with your customer service team and know they can trust clicking on the email. 


Also, do not stray from the way you convey your messaging. If your company is fun and witty, keep with this messaging in your email. If your company has a more serious tone, then go with that. But, be sure to change the copy as the customer gets closer to cancellation if their payment is not processed. You want to let them know you want them around, and they must take care of their card updates as soon as possible, but in various ways along the email journey. Be sure also to limit the number of links that are in your emails. One or two buttons should suffice. The most crucial button should be to update their payment information. 


Make sure there is a person dedicated to replying to your dunning emails. Having a dedicated person to respond to emails ensures trust in your customers to know they can reach an actual person if a problem arises through their card update process.

Minimize Automation

Automation is a fantastic tool. It’s incredibly helpful for sending emails based on what customers have clicked on your website, or based on whether or not they opened an email. 


An automated email can even come in handy when collecting failed payments and serve as a friendly reminder to update your card information. But, sometimes, our emails go by the wayside, and customers don’t open them or interact in any way. 


You may have to change how you contact these specific customers. One way is to send these particular customers an extremely personalized email based on their unique billing issue. A team of revenue recovery specialists can easily asses unique failed payments with customers.


Using real people to contact customers who have lapsed due to failed payments will allow these customer service agents to work through any questions or concerns your customer may be having while encouraging them to continue the use of your service.


Human-to-human communication will always offer much more value to your customers than automation ever will.

Avoid Over-Sending Emails

Sending too many emails can fatigue and frustrate your customers. That’s why every email needs to be sent with intention.


It can be easy to want to react quickly when a failed payment occurs… but be sure to try processing the payment multiple times before reaching out to contact the customer to ensure this isn’t an error of your payment processor. 


If you’ve attempted to process the payment a few times with no luck and no issues with your own processor, it’s time to send the customer a personalized email.


Always use empathy when communicating with your customers, and be sure not to place blame or be too pushy when sending emails to failed payment customers. 


These types of processing issues require tact and patience. While retrieving failed payments can require multiple emails, know when it’s time to call it quits.


By avoiding annoying your customers, they’ll be more likely to return to your business in the future.

Conclusion


Involuntary customer churn is a natural part of owning a business; it will happen. However, by using dunning best-practices and recognizing that behind every failed payment is a customer, you can more successfully retrieve lost revenue from involuntary churn and improve customer retention.


If you don’t have the resources or want professionals handling failed payments for your company, Gravy is here to help. Get Your Free Proposal Today


Start Recovering
Failed Payments Today.
Start Recovering
Failed Payments Today.