Dunning
Dunning Management
Retention
The process of communicating with customers to recover failed payments. Includes retry logic, email sequences, and SMS reminders to update payment methods.
What is Dunning?
Dunning is the systematic process of communicating with customers when their payments fail. An effective dunning strategy can recover 20-70% of failed payments.
Components of a dunning system:
- Payment retries: Automatic retry attempts at optimal intervals
- Email sequences: Escalating notifications about payment issues
- SMS reminders: High-urgency payment update requests
- In-app messaging: Notifications within your product
- Account updater: Automatic card detail updates
Best practices:
- Start with soft reminders before hard warnings
- Personalize messages based on customer value
- Offer easy one-click payment update links
- A/B test subject lines and messaging
- Retry at optimal times (payday patterns, etc.)
- Use multiple channels (email + SMS)
Why Dunning Matters
Effective dunning can recover significant revenue that would otherwise be lost to payment failures.
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