⬇️ delinquent churn with a dunning email campaign

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Anuj Adhiya Thu Jan 25 2018
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RETENTION

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:

  • Pre-dunning 1: Customer enters the delinquency segment with one month until expiry. The first dunning email is triggered.
  • Customer either updates card and exits the segment, or
  • Takes no action and remains in segment.
  • Pre-dunning 2: The next email is triggered a week before expiry.
  • Customer either updates card and exits the segment, or
  • Takes no action and remains in segment.
  • Dunning: The third email will arrive on the day of expiry.
  • Customer either updates card and exits the segment, or
  • Takes no action and remains in segment.
  • Post-dunning: A final email is sent a few days after expiry (with a warning that the customer’s account will be deactivated due to credit card failure).
  • Customer exits campaign.

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:

  • Reminding them why they love your product
  • Setting a deadline for urgency
  • Showing them what they would lose
  • Offering ongoing support

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

Implementing a dunning email campaign will help reduce delinquent churn.

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