A challenge for any subscription-based business is keeping those recurring payments coming in. When they don’t, you’re left making phone calls and sending emails. You’re following up with customers about delinquent accounts, and that’s no fun. Worse yet, it’s a waste of your time. If you’re a SaaS company or you sell software online and offer recurring billing, you need to do yourself a favor and implement a dunning management system.
Here are 5 reasons dunning management makes sense for you and your business.
Reason #1: Dunning Management Saves You Time
If you're depending on a person to send out monthly reminders to all delinquent accounts, you're putting a lot of faith in an all-too-human memory. What happens if that person gets sick, or if they're swamped with extra work one month? If you miss a monthly notice, you're simply prolonging the time it will take to get paid.
Why not automate the process? A dunning management system automatically sends out reminder notifications to your delinquent accounts. If, for instance, a credit card fails, a dunning letter is automatically created and sent out immediately—even while you sleep. Automating your dunning system leads to less stress and less hassle.
Reason #2: Keep Money In Your Pocket
Automatic recurring payments are great for revenue… when they keep recurring!
Unfortunately, the system isn't foolproof. Credit cards expire, get canceled, or just stop working for any number of reasons. When you send these credit card users friendly notice(s) to let them know that the card's not functioning as intended, you'll ensure you're getting paid for your services to the scheduled time as possible, which means more money in your pocket.
Reduces Your Customer Churn
We all know it’s not just harder to acquire customers than keep them, but it's also significantly more expensive. Why not expend a little extra effort to keep customers who have already "bought in" satisfied?
By sending dunning notifications to your customers, you significantly reduce the chance of losing them. In many cases, the lapse in payment was completely unintentional. Once the customer's notified, they correct the credit card issue, and they continue on as a satisfied customer for years to come, which results in reduced customer churn.
Increases Your Work Efficiency
No business owner wants to spend valuable time writing emails or making phone calls about failed credit cards. Dunning management means you don’t have to anymore. Your billing system does all the work for you, while you and your business roll along, efficient as ever.
Improves Your Customer Relations
Dealing with failed credit card payments can cause you to lose patience and become irritable. That’s understandable. But that’s the wrong time to call or email a customer about a delinquent account. Instead, dunning letters can help breath easier knowing that customer-friendly reminders are automatically being sent out. That way, your customer can make the correction for the credit card they forgot expired last month without friction, demands or headaches. They’re happy & you’re happy. Good dunning management functionality can create this win-win solution.
Dunning management is a no-brainer for any subscription-based business. If you’re not using it with your recurring billing system, move to a system that has this feature as a core component. Take a moment now to learn more about FastSpring's dunning management features. Keep your customers, keep on-boarding new customers, and enjoy reduced churn & enhanced LTV (lifetime value) for your primary asset – your valuable customers.
Wondering if your subscription management system is up to snuff? Click here to download our 8 Essential Features checklist to find out!