What is dunning?
Dunning refers to the process of contacting customers to let them know their payment has failed and to request updated payment details. It’s a crucial practice for businesses that rely on recurring payments, such as subscription services, because customers don’t manually re-enter their payment information for each transaction. Over time, stored card details can expire, become invalid, or be declined for various reasons. Dunning helps prevent involuntary churn, ensuring businesses retain customers and maintain steady revenue.
Effective dunning strategies
Modern dunning practices go beyond simply sending overdue payment reminders. They include both behind-the-scenes solutions,such as automatically attempting to process payments again,and direct communication with customers to resolve payment issues.Previously, some companies used “pre-dunning” messages to warn customers before their cards expired or failed, but advances in payment technology, like automatic card updater services, have made this approach less necessary.
Businesses can often recover payments without customer involvement by retrying the existing payment method at scheduled intervals. To minimise customer disruption and avoid flooding inboxes with payment failure emails, many companies set up custom retry schedules, giving payments several chances to succeed before alerting the customer. When customer outreach is needed, it’s important for dunning emails to align with the brand’s tone and identity, helping maintain a positive customer relationship even in awkward payment scenarios. Finally, regularly tracking and analysing the success of dunning efforts is key for refining processes and reducing churn over time.
