9 Tips to Improve Your Dunning Email Recovery Rate

Before we jump into this section, I want to preface it by saying there is no “perfect” template for dunning emails. Dunning best practices that work for one company might not work for yours. The only way to find out what works for you is to test.

If your dunning emails haven’t been as effective as you’d like, or you just want to experiment to see if you can recover more revenue, give these tips a try.

1. Send Multiple Emails

One of the biggest mistakes you can make with your dunning emails is to just send a single email and hope for the best.

People put things off, emails get overlooked, and life happens. If you want to recover more revenue from failed payments, you have to be persistent.

So just how many emails should you send?

Well, we analyzed over 1 million dunning emails sent by our customers with Recover, and here’s what we found:

As you can see, the first email sent is the most effective (0 days = the email sent the day of the failed payment). But look at the following emails sent after that.

Imagine if you only sent the one initial email. All the customers who didn’t open or click your email or update their billing info would go unpaid until who knows when.

This is one of the reasons we don’t recommend relying on out-of-the-box dunning emails from your payment processors.

With most of them, your emails are sent over the course of 7-14 days. And as you can see from our data above, expanding to 30 days allows you to recover A LOT more revenue.

If you’re concerned about coming off as too pushy by sending multiple dunning emails, don’t be. Here are some examples of companies that send a series of dunning emails without coming off as annoying.

First, here’s an example from Snappa.

0 days after delinquent

Subject: Uh-oh! Your payment for Snappa failed

Hi there,

It looks like your subscription payment for Snappa didn’t go through. Please update your billing information and we’ll give it another try!

{BillingLink}

Let us know if you have any questions.

– Jonny

3 days after delinquent:

Subject: 2nd notice: Another unsuccessful payment for your Snappa account

Hi there,

We just tried to process your subscription payment again but unfortunately it didn’t go through. To keep your Snappa subscription active, please update your information in your billing settings here:

{BillingLink}

Let us know if you have any questions.

– Jonny

7 days after delinquent:

Subject: Final notice: Need updated Snappa billing information

Hi there,

We just tried to process your Snappa subscription payment for the third time, but unfortunately it failed once again.

You can update your information in your billing settings here:

{BillingLink}

If the next charge fails, your account will be cancelled automatically 🙁

Let us know if you have any questions.

– Jonny

Notice how they customize the subject line and text of each email. And the wording gets increasingly urgent with each email. The first email is a gentle reminder and the last one is a final warning.

If you’re sending a sequence of dunning emails, make sure you’re measuring the success of each one. That way, you know what’s working and what’s not.

For instance, we track the performance of each dunning email we send, which makes it easy to see where we can make improvements.

Plus, it allows us to quantify the impact of each email in the series.

2. Change Your Email Copy Periodically

If things are going good and you’re recovering revenue with your current dunning emails, it’s easy to get complacent. As the saying goes, “if it ain’t broke, don’t fix it.”

Unfortunately, that doesn’t always hold true.

Your emails might not be broken, but they could be worn down. And you’ll never know unless you change them up.

Another time when it makes sense to change your dunning emails is to adjust for major events.

Take this email from Email Meter for example (they change their template every few months):

“Hi!

This is (…) from the Email Meter team! We understand that the current situation has shifted all of our focus, making it a bit difficult to deal with our daily tasks. I’m reaching out because unfortunately, we weren’t able to process your most recent Email Meter payment. 

This typically happens to our customers when the card associated with your account has expired, there has been a change in your billing address, or your bank needs your authorization. We are here to make your life easier and if you would be interested in chatting with us we can guide you through the next steps.

Or if you prefer to go solo (it doesn’t hurt our feelings) you can log into your Email Meter account and review your account details.

Update your account in 3 easy steps!

1. Log into your Email Meter account
2. Go to the “my account” icon in the left sidebar
3. From here you can edit your payment method and billing information 

Talk soon!”

Notice how the beginning of the email is customized to acknowledge what’s going on in the world at the time.

There’s no rule that every dunning email you send needs to be the same. Test and analyze!

3. Show Them What They’re Losing (AKA Loss Aversion)

Telling someone they have a bill due isn’t always enough to motivate them to take action. If they don’t feel like it’s urgent, they’ll take their time and eventually forget about it.

In order to get around that, you can use a little psychology to light a fire underneath them. Specifically, loss aversion.

Loss aversion is the idea that the fear of losing something is greater than the joy of gaining the same thing. So let’s say you lost $100. Loss aversion suggests that your reaction to losing that $100 would be twice as strong as the reaction you’d have to gaining $100.

Here’s how to translate that to your dunning emails: Instead of telling your customers that their payment didn’t go through and asking them to update their billing info, let them know exactly what they stand to lose if they don’t act.

Here’s an of loss aversion in a dunning email from WP Buffs.

They were also kind enough to share some success metrics around how well their dunning emails are performing, with data captured by Baremetrics. You can learn more about enterprise dunning solutions to see how these platforms work. 

In order to make loss aversion particularly powerful, you can include the worst-case scenario like Kinsta does in this dunning email:

“Hello {First Name},

We’ve been unable to process your company’s (Company Name) payment for Kinsta services. We received the following information from your card issuer: {Card Error}

Please note that we will attempt to charge your payment method three more times in the next 15 days. If the third attempt fails, we will stop all services associated with your account which will result in your websites appearing offline and your content deleted from our platform.

For more information about outstanding invoices, please see this knowledge base article: What Happens if I Don’t Pay My Invoice?.

Thanks so much for your immediate attention to this issue! If you need assistance, feel free to contact our team from within MyKinsta. We’re here to help!”

The fear of having your website taken down and losing all your content is more than enough motivation to login and update your billing information as soon as possible.

If you want a more subtle approach for using loss aversion in your dunning emails, check out this example from StoreRocket Store Locator:

They politely warn customers that if they don’t make their payment soon, their service is at risk of getting canceled.

Using Loss Aversion in Dunning Emails

Here are a few tips to get you started: 

• Be specific: Saying “your account is at risk” is a good start. But to make your dunning emails more impactful, get specific. Exactly what will the customer lose if they don’t update their billing information?
• Show empathy: You don’t want to sound threatening. Make it clear that the reason you’re sending the email is that you don’t want them to lose anything.
• Give fair warning: Notice how companies gave clients an ample heads up in the examples above . The emails weren’t notifying them that they had already lost something, but rather, what they awere going to lose soon if they don’t take action.

4. Personalize Your Emails

By now, most SaaS companies are aware of the benefit of personalizing emails. But sometimes, that knowledge starts and ends with email marketing.

Your dunning emails should be personalized too!

Not only will it help with email deliverability, but people are more apt to respond to an email that seems like it was sent specifically for them.In fact, one report showed 62% of consumers were more excited to respond to a personalized message than a generic one.

Your personalization can go beyond just including the person’s name. Here are some other ideas.

You can, for example, try sending your email addresses from a person instead of a company email name. Most people prefer dealing with people over no-name bots in terms of customer service, andthe Sent-from name in your emails has a major impact on whether or not people open them.

To take things a step further, research shows that using a person’s name instead of a company name can increase your open rate by up to 35%.

Whatever you do, please DON’T send your dunning emails to “donotreply@domain.com.” It puts up a wall between you and customers and makes it seem like you don’t want to talk to them.

And like I mentioned earlier, sometimes the reason your customer’s payment didn’t go through isn’t as simple as updating their billing information. So you need to make it easy for them to get in touch with you.

Even if the emails are automated, having them sent from a person makes them feel a little more human like this example from Wiza.

Another subtle way to personalize your dunning emails is to include a piece of info specific to the customer’s account. For instance, Kapa99 includes the amount of the charge that failed.

Hey {Name},

Your friends at Kapa99 here.

I am writing because it looks like your subscription payment of {Amount} didn’t go through.

Please update your information here and we’ll give it another try.

Let us know if you have any questions,

—

Ka Kei Ho at Kapa99

Founder, Kapa99

The team at DeskTime includes the billing period the failed payment was for.

Creating personalized dunning emails like these is pretty simple. Here’s an example of how we put ours together. We use tags to personalize each email we send.

If you’re starting from scratch, or don’t currently do any personalization, here are some things to start with:

• Include your customer’s name
• Mention their company name (if you sell B2B)
• Last four numbers of their card
• Amount of the charge
• Use a real person for your “From” name
• Send it from an email that’s actively monitored (do not use donotreply@whatever.com)

5. Don’t Be Afraid to Add Personality

Yes, you’re essentially sending out a collections email. But that doesn’t mean it has to be dull and boring.

Using a more “cheerful” and upbeat tone in your dunning emails can be a good way to grab your customer’s attention.

Check out this example from Zalster, who mixes emojis and casual language into their dunning emails to add a little flavor.

“Subject line: Failed payment to Zalster, uh oh.

👋 there,

I just got a notification of your payment failing with Zalster. How unfortunate! Luckily, this happens to a lot more users than you’d think so don’t beat yourself up about it. The bad thing is that your optimizations aren’t running if your payment fails.

Usually, it has something to do with one of the events below:

1. Your card has expired 📅
2. You’ve got insufficient funds or you’ve reached your limit 💸
3. Your card has been stolen, disappeared, eaten by your dog or something like that and you haven’t updated your account with the new one 💳

Have a quick check of what’s up and get it fixed so we can get back to growing your business by automating and optimizing your Facebook and Instagram Ads 🚀 💰!

Kind regards,

Emma

Head of Client Success”

This email is getting them a 60% open rate, so they’re doing something right.

It’s easy to sound robotic and vanilla with your dunning emails. Using a lighter and empathetic tone is a simple way to make your emails sound more natural.

6. Offer an Alternative to Cancellation

If a customer’s payment doesn’t go through, it doesn’t need to be an “all or nothing” situation. Depending on your pricing model, you can offer customers an alternative to canceling their account due to a failed payment.

This is particularly helpful if the reason for the failed charge was insufficient funds.

Here are some dunning email examples from other SaaS companies who offer customers alternative solutions to closing their accounts.

Social Status downgrades customers to a free plan until they update their billing information.

If you don’t offer a free plan for your software, you can take a page from History Hit’s book and offer your customer a special deal to continue using your service. They used this email as part of a larger campaign to bounce back after a 66% increase in cancellations. 

I’d only recommend offering a deal like this in certain scenarios though. 

If the payment failed because the card was expired or they just needed to update their billing address, cost isn’t the issue. They have the ability to pay in full, they just need to update their info. So you’d be better off pushing to get them to update their billing information.

On the other hand, if the charge failed because they had insufficient funds, then offering a discount to prevent them from churning could be a good compromise.

7. Send In-App Reminders

Not everyone checks their email regularly. Plus, like I mentioned earlier, most people get so many emails it’s easy to get overlooked.

That’s why instead of just sending dunning emails, you should also set up in-app reminders when a payment hasn’t gone through. You can see an example created with Baremetrics below.

If you sell a product that customers log into regularly, this might be even more effective than your emails.

Appointedd sends this in-app message to customers when their payments fail. They also make it easy to ask questions or get more info by using chat.

The more communication you have with customers when their payments fail, the better. In-app reminders give you another channel to connect outside of their inbox.

8. Send Your Emails to The Right Person 

Depending on how your product and billing are set up, the primary user might not be the person in charge of paying the bill. This is particularly common with B2B SaaS products.

If your software allows for multiple users, it can be helpful to send your dunning emails to all the emails under the account. That way, you have a higher chance of getting a response and don’t have to wait for one person to forward your email to the right person.

That’s exactly what SiteSwan does. They send their dunning emails to all users on the account who have Billing permissions (also notice the loss aversion!):

“Subject: Urgent! Your account is past due

Hi {Account Name},

It appears your credit card ending in 7570 has failed to go through. We will automatically try processing the card again in 24 hours. If this card is no longer valid or there are insufficient funds, please update your payment information by logging into your account immediately. Your accounts and sites are at risk of coming offline if your payment does not go through successfully.

Update your account here: http://manage.multisiteadmin.com/billing

If you have any questions, please let us know.

Thank you,

SiteSwan

http://siteswan.com/

1-800-462-9814”

Don’t miss out on revenue just because you sent your dunning emails to the wrong person.

9. Use Pre-Dunning Tactics to Warn Customers in Advance

You don’t have to wait for your customer’s payment to fail in order to contact them. To prevent failed payments for expired credit cards, you can be proactive by sending a pre-dunning email.

According to our analysis of almost 300,000 pre-dunning emails, they have a higher success rate than some dunning emails sent after a payment fails.

What exactly should you include in your pre-dunning email?

And here are the pre-dunning emails we send to our customers at Baremetrics.

We send this one 30 days before the credit card expiration date.

And this is what we send seven days before the card expires.

In most cases, it’s better to be proactive than reactive when it comes to dunning emails. You can use Recover to create your pre-dunning emails up and track their performance.

Give Your Payment Failed Emails a Makeover

“Perfect” dunning emails don’t exist. There are always things you can adjust. And what works for one company might not work for another.

The important thing is to experiment and always try to make improvements. When it comes to lost revenue from failed payments, even a slight improvement in your recovery rate can make a huge impact on your MRR.

The Baremetrics Messenger tool can help you understand the performance of your payment failed emails so you can continuously improve. 

Tired of wasting time on spreadsheets? Get a free trial of Baremetrics today