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A challenge faced by all subscription-based businesses is figuring out a way to keep recurring payments flowing for their company. And since revenue is closely tied with business growth and wellbeing, any dip in recurring revenue is immediately felt throughout the entire organization.
With such an important business metric on the line, SaaS companies need to be very diligent about how they’re managing recurring billing to ensure that their business is supported with a consistent stream of revenue at all times. To help your company understand the value of dunning management, we’re sharing 4 ways having a robust dunning management process can benefit your online store.
Reason #1: Dunning Management Saves You Time
Having someone in-house manually sending out monthly reminders to all delinquent accounts carries its own inherent risks. What happens if that person gets sick or is swamped with extra work and can’t process invoices? If you miss a monthly notice, you’re simply prolonging the time it will take to get paid.
But what if there was a better way to outreach to delinquent accounts and collect overdue payments? A dunning management system automatically sends out reminder notifications to your delinquent accounts on your behalf. If, for instance, a credit card fails, a dunning letter is automatically created and sent out immediately. Since your company already has an automated dunning process checking up on delinquent subscription accounts, you can reallocate company resources towards supporting your core business.
Reason #2: Keep More Money in Your Pocket
Recurring payments are great for subscription businesses because they provide a predictable stream of revenue that companies can use to forecast future growth. Unfortunately, collecting recurring payments is riddled with its own challenges. The debit and credit cards used to pay for these recurring payments can get canceled, expire, or get lost—resulting in payment failure and an interruption in your customer’s subscription. Being proactive about notifying users when their payment fails to process helps ensure that your business is getting paid for your services in a timely manner.
FastSpring’s built-in dunning features allow your company to set flexible email reminder notifications at two, five, seven, 14, and 21 days after a customer’s payment method fails.
Reason #3: Reduce Your Customer Churn
We all know it’s not just harder to acquire new customers, it can also be significantly more expensive too. To cut down on customer acquisition costs, it is important that your company focuses on protecting your current customer base.
Sending dunning notifications to your customers helps reduce customer churn by opening up a clear channel of communication. As previously mentioned, your customer’s out-dated payment information could be the cause of payment failure. Notifying your customers that their credit or debit card information is expiring is one way to reduce this instance of unintentional churn. Not only will these automated reminders help your business enjoy more reliable revenue, but they also help maintain a positive customer experience by preventing an interruption in your customer’s subscription service.
Reason #4: Increase Your Work Efficiency
No business owner wants to spend valuable time writing emails or making phone calls to customers asking them to update their payment information. Now imagine if you’re managing thousands of customer accounts and billing information—the process can quickly become overwhelming.
Luckily, partnering with an ecommerce partner with automated dunning features can streamline the entire process. Rest easy knowing that customer-friendly reminders are automatically being sent out on your behalf. Whether your customer needs to update their existing payment information or just needs a gentle reminder to make a recurring payment, FastSpring’s dunning features make it easy to keep in contact with your customers.
Wondering if your subscription management system has all the features to support your growing business needs? Download our free ebook: 8 Essential Subscription Management Features to find out.