Churn is most often thought of as cancellations, but the #1 source of churn for SaaS companies is delinquency. According to Price Intelligently, 20-40% of SaaS companies' churn springs from failed and expired credit cards.
This happens because some credit card or the other expires every month and customers may not even know it. But you can prevent this churn before it happens. Dunning messages are transactional emails that remind customers of what they love about your product and why it’s worth updating their payment methods.
Your dunning email strategy should include three elements:
A. Timing: Create several emails, giving customers multiple chances to solve credit card issues.
If you have the card expiry data associated with the customer profile, you can use that information to create an event that triggers the dunning campaign. A campaign might look like this:
B. Copy: Consider the reasons why customers would want to reinvest in your product
The copy should be focused on a single goal: getting customers to the billing page to update their payment details.
The key is to keep the customers' needs in mind. Leading up to the call to action, you can use copy to demonstrate your value to the customer by any combination of:
C. Call to Action: Make the next steps easy to follow.
Your instructions should leave no room for guesswork and include specific CTAs like "Reactivate Now". Post-CTA, the billing page should have clear instructions and troubleshoot other issues.
By connecting with customers before credit card delinquency, you’ll boost retention and strengthen existing customer relationships.
For practical examples of how companies have implemented these strategies, check out the link below.
Source: Customer.io Blog