Failed charges are low hanging fruit for most subscription companies. The average early stage subscription startup is losing over $1500 per month to recoverable failing charges. 🙀
Most of these customers don’t even realize their card is failing. There’s no malicious intent, they’re just oblivious. The easiest way to get customers to update their billing info is by blocking access to your app or content.
But it’s also the most heavy handed…especially if the reason the card is failing is due to a stolen credit card and the customer is just waiting on a new number to get issued. Progressively getting pushier tends to work better.
Send a series of 2-4 emails for a couple of weeks that let the customer know their card is failing with a link to update it. Then on the last email, mention you’ve had to block access. At which point you should block access to their account with a note and link to update their billing info.
If the customer goes more than a month after you’ve blocked access, you should consider them cancelled and move on.
Now, it’s a big pain to manually do this (and generally it’s also pretty inefficient). Using a Dunning tool can automate the entire process for you. There are lots of different dunning tools out there, many of which are built right in to your subscription billing software (such as Recurly).
If you use Stripe, we at Baremetrics happen to offer a Dunning tool (baremetrics.com/dunning), but the bigger tip here is just to get something in place so you aren’t leaving money on the table!