In this case, churn is the rate of existing customers that stop utilizing a product or service. The churn rate measures a business loss in subscribers or members for a given period of time. Every business has voluntary and involuntary churn. The silent killer for your members is involuntary customer churn due to failed payments. When you spend time, money and energy in gaining a new member the last thing you want to do is lose the member due to payment failure. Inevitably all credit cards have an expiration date, members mismanage funds, and gateways can have miscellaneous errors. Dunning can be your secret weapon to reduce churn and lower the annual churn rate for both new customers and current customers.

Dunning is the process of methodically communicating to members to ensure the ability to collect recurring payments. This in turn will lower churn rates for a specific period faster than other payment gateway methods. While payment recovery has changed over the years to become more intelligent and seamless for your business, the goal has remained the same—recover the funds and keep the member. 


Pre-Dunning takes place when you reach out to a member prior to a payment being run. This can be nice potentially if you are only billing once or twice a year to remind the member the payment will be taken out on the specific date otherwise if it is a monthly payment you could be contacting the member too many times in a year with e-mails.

Expired cards—within the year 20-30% of your members cards will expire. It used to be industry standard to send your members reminder e-mails anywhere from 30-1 day before their expired card was run and to remind the customer to update their card on file. We recommend not doing this. Why do you ask? If you don’t have an account updater included in your payment processor now is the time to add that or find a processor that offers PROACTIVE updates on all lost, stolen, or expired credit cards.

Think about the scenario: you did not have to manually pick up the phone or write an e-mail to your member; it was seamlessly updated before the card was ever run. Personally, it is hard to remember to call every single membership or subscription you have on file and update them one by one. Trust us—your customer will appreciate the automatic update and you also eliminate the chance of the member just canceling due to the frustration or updating their card.


Dunning is when you e-mail or make a phone call every single time the member’s payment fails in an attempt to recover the payment. This can be useful, but you may be giving a member a way to cancel too soon. Typically, the recovery rate for the process of phone calls and e-mails averages a recovery rate of 40%-60% at best.

The process of recovering failed online payments can and should be done with intelligence and backed by data. Recovering 80%-90% of failed payments can be done without spamming your member and it is essentially invisible to your members. This recovery payment process is called intelligent recovery and only leaves you with 10-20% of payment failures to actually use your dunning process.


Post-Dunning is the process that comes into play after you have attempted to recover the failed payment. Possibly you have reached out already in multiple e-mails but have had no success in recovering. When the average person receives 100 e-mails a day your message could get lost in the inbox. A service that allows you to create custom e-mails, phone calls and text messages and using a combination of these is the best way to get a hold of your member. Post dunning also allows your time to gather data, just e-mailing a member their payment failed with no information could seem impersonal and turn the member off from your business or services. Your payment processor should be able to provide you with payment method details on exactly why the payment did not go through. Maybe there was fraud on the account and you can customize your message to the member being sensitive to their situation.

Which dunning process is best?

If you can receive proactive updates on lost, stolen and expired AND recover 80-90% without jumping the gun on your dunning process that is our best recommendation. Again being left with 10-20% to use a combination of phone calls, text messages, and e-mails saves you and your business time and money.

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