4 Methods Dunning Management Reduces Churn -
A challenge faced by all companies that operate on subscriptions is finding how to maintain the flow of recurring payment for their company. Since revenue is tightly dependent on business growth and overall health, any decrease in recurring revenue is immediately experienced throughout the entire company.
Reason #1: Dunning Management Saves You Time
Having someone in-house manually sending periodic reminders to all delinquent accounts is a risk in itself. What happens if the person becomes sick or overwhelmed with extra work and can't process invoices? If you miss a monthly notice it's just prolonging the time it will take for you to be paid.
What if there were a better way to outreach to accounts that are in delinquency and get overdue payments? A dunning management system automatically sends out reminder notifications to your delinquent accounts on behalf of you. For instance, if a credit card fails, a dunning letter is created automatically and distributed immediately. Since your company already is able to automate the process of monitoring delinquent subscription accounts, you are able to redirect the resources of your company to support your core business.
Second Reason: Make Sure You Keep More Money in Your Money
Recurring payments are great for businesses that subscribe because they provide a predictable stream of revenue that companies are able to use to predict the future of their business. But, collecting recurring payment comes with its own challenges. Credit and debit cards that are used to make these recurring payments can get cancelled, expired or become lost, leading to payment failure and an interruption of your client's subscription. Making sure you notify customers of any payment issues that occur during the process helps ensure your business gets compensated for its services promptly.
Built-in dunning capabilities allow the company to schedule an email reminder that is flexible and can be scheduled for two, five, seven 14 and 21 days after the payment method of a client fails.
The 3rd reason is to reduce your Customer Churn
It's not just harder to acquire new customers, it can also be significantly more expensive too. To cut down on the cost of acquiring new customers you must ensure that you focus on protecting your current customer base.
Reason #4: Increase Your Work Efficiency
A business owner does not want to waste time writing emails, or even making phone calls to customers asking customers to update their credit card data. Now imagine if you're managing thousands of customer accounts and billing information--the process can quickly turn into a nightmare.
A good news is that working with an ecommerce partner with automated dunning features can streamline your entire process. Relax knowing that user-friendly reminders are automatically being delivered on behalf of you. If your customer requires to update their existing account information, or needs a gentle reminder to schedule a regular payment, the dunning capabilities of's help you stay on top of your clients' needs.
Do you want to know if your subscription-management system is equipped with the right features that your requirements for business? Download our free ebook 8 Essential Subscription Management features to discover.