How to Write The Perfect Dunning Email Sequence (With Examples)
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When a subscription payment fails, it's time to send a dunning email.
Dunning emails can be a frustrating experience, both for your team and for customers.
Phishing scams are rising, and consumers are increasingly careful clicking links or sharing personal information.
Brands must establish trust with their customers and craft the least-invasive dunning experience possible to be successful.
How do you do that?
Below, we'll share how to create the perfect dunning email sequence and recover lost sales — without damaging the customer experience.
Churn Buster helps companies reduce eCommerce churn with custom dunning emails, SMS messages, and more. Try it for free.
Step 1. Focus on the Customer Experience
Have you watched someone's card get declined in the grocery store checkout? The confusion (and shame) is uncomfortable for everyone.
Similarly, receiving a dunning email can be an uncomfortable experience for customers.
Look at it from their perspective: they’ve opted into a subscription, received their products on schedule, then out of nowhere, they need to take action to avoid service cancellation.
When dunning is done poorly, it shatters the simplicity of the subscription eCommerce model — and that can make or break your customer’s feelings about your brand and their decision to continue subscribing.
Remember, the driving motivation to sign up for subscription boxes is a streamlined, curated experience. When that process becomes a hassle, your customers might look for a simpler way.
Don't let your dunning email give them a reason to walk away.
Instead, view dunning emails as a part of a broader campaign.
In a sense, you can look at it as a lead nurturing sequence.
Take a look at how Dropps uses catchy subject lines and content to create a more natural, positive experience for the customer:
Focus on highlighting the existing relationship between your customer and your brand and the value you’re already providing.
Use on-brand and trustworthy designs and include details about their subscription order — for example, what items will be coming, including pictures.
And get that payment information. (obviously!)
Step 2. Use Appropriate Sender Information
Dunning is a tricky moment in the customer experience, so you’ll want to approach your dunning message with a high level of professionalism and a personal touch.
Consider using a recognizable team member as the primary sender to make the email more personal.
If using a specific team member feels wrong for your brand, use an email address from your domain that showcases the financial aspect of the email; for example, firstname.lastname@example.org.
The ability to reply to these emails directly can really streamline the customer experience, so consider directing the “reply-to” to your support team email.
The most important thing here is that your customers recognize and trust the email they’re receiving. Avoid third-party mentions in the sending address (i.e. CompanyViaDunningProvider@blahblah.com), as these can confuse customers.
If you use a third-party dunning provider, like Recharge or Stripe, the emails are mailed and signed by their domain, not yours, which increases the chances of customers ignoring those emails.
Step 3. Use More than One Sender Address
Let’s say your initial dunning email comes from a member of your customer service team. Follow-ups can up the ante and help these messages to stand out in your company inbox by using a different email address.
It’s a simple change, but sending the next email from your CEO, founder, or CFO can add a level of name recognition and help prompt a response.
For smaller teams, you might create a persona to use as an email sender.
By letting your customer know that multiple people are waiting on their response, you increase the sense of urgency without being too pushy.
The other benefit to switching up senders is that the emails aren't threaded as a single conversation in the inbox. Changing the sender and subject line means a fresh chance to be seen in overcrowded email inboxes.
Step 4. Separate Marketing and Transactional Emails
Don’t use the same sender for your dunning and marketing emails.
Customers don’t feel the same sense of urgency when they receive marketing emails.
Transactional emails should stand out as a different kind of message; one that requires a prompt response.
It’s essential to use different tools for your marketing and transactional emails. The two types of messaging serve totally different needs, and require a distinct approach to be successful.
We recommend Postmark for transactional emails and Klaviyo for marketing emails.
Transactional emails also have a higher deliverability rate and lower spam rate than marketing automation services, yet another reason to separate the two. You don’t want to face delivery issues when it comes to important transactional emails (like dunning emails).
As a transactional service, Churn Buster maintains an all-time bounce rate of 1.4% (very low) and a spam rate of 0.01%.
Step 5. Send a Last Chance Offer
What do you do when all other options have been exhausted? You’ve retried the card on file, you’ve contacted the customer repeatedly via email, and maybe even SMS and the customer hasn’t issued payment, but they also haven’t canceled their subscription. The next step is to send a last chance offer to see if they’ll stick around?
There are two main ways to do it: offer a discount, or offer a free gift.
Some customers will accept the offer and simply churn the following month. But others will stick around for many months to come.
If the math looks right, don’t let customers churn without offering them a compelling reason to stay. The value of an active subscription is worth far more than a single transaction.
Step 6. Make Your Branding Clear and Concise
You don’t want to overwhelm your customers with too much information- so how do you create a strong branding experience in a limited space?
First, there’s no need to use an image-heavy layout. Going overboard could hurt your engagement rate. Instead, focus on subtle branding elements that help customers recognize your business and feel confident re-entering their information.
A small logo (with letterhead if you generally use that) plus links in your branding colors establishes the email really is from you without creating longer load times or adding distracting information.
Check out this wonderful dunning email from LOLA:
Keep your messaging and tone on-brand. If your communications generally feature some humor and levity, feel free to include a line or two in this style.
Simple, branded HTML templates streamline the process, particularly if they don't require coding or testing. After all, a dunning email with broken code (which can happen in different email clients) is a huge red flag.
With Churn Buster, you can add simple, branded HTML templates with no code or testing.
Step 7. Send Multiple Emails & Change Up the Content
We tend to treat automated messages as less urgent than emails from an actual person, so changing up your approach is important to avoid coming across as robotic.
Your emails should escalate in urgency. Consider mixing up channels (SMS vs. email), and use different sender display names to hit customers at different emotional angles and make them feel like they’ll miss out if they don’t take action.
Change up your subject lines as well. If initial messages get caught in spam filters, repeating the same subject will likely result in all emails landing in spam.
The body of your message should build a sense of urgency by focusing on the impact of failing to fix the issue.
One last note: Send at least one email as plain text. Most people don’t use HTML-blocking email clients, but some do.
This is also an opportunity to mix in a personal message from someone on your team, rather than a more transactional style. Different methods work for different people, so it's best to cover your bases.
With Churn Buster, you can see the performance of each email in your campaign, and get a better understanding of which style is most effective for your customers.
Step 8. Leverage FOMO
FOMO (or fear of missing out) is a huge part of our modern lives, and focusing on benefits is one of the key ways eCommerce companies can drive engagement.
Let customers know you have an exciting box ready to ship, and focus on the cool stuff they'll miss out on if they let their subscription lapse.
Make it clear when they will stop getting their deliveries and what the consequences will be (from a deeper, emotional standpoint), and reinforce the benefits they get from your brand. Make customers think, “Ooh, that’s why I want to get this fixed ASAP!”
Four Sigmatic does this really well in this dunning email:
Step 9. Make Card Updates Easy
You’ve worked hard to craft messaging that is recognizably yours; don't throw away that effort by confusing customers with a complicated process.
Explain how to fix the issue and include a unique, secure identifier in the URL that your customers click from their email so they can instantly update their information without logging in.
Here's an example from Butcher Box that keeps it simple:
This keeps it simple for customers trying to solve the issue from their phones (which is most of them).
The time spent digging around for a password can be all it takes to drag the whole process to a halt.
If the process is complicated, customers might decide to come back and “take care of it later” — and forget. Or decide to buy more of what you’re selling at the local store, or shop elsewhere online.
Keep your dunning message simple, and focus on a single call-to-action.
Step 10. Avoid Sending Dunning Emails (Unless You Have To)
It might seem counterintuitive to recommend avoiding dunning emails after we've spent so long explaining how to get them right.
Here’s the thing: often, you can take care of failed payments without ever sending a single dunning email.
Many companies jump to a dunning email before exhausting other options.
It’s not just irritating for your customers - it’s also less effective and requires significantly more work from your team.
Card retries often seamlessly fix payment issues without bothering the customer at all.
In fact, by waiting just a few days before emailing, and front-loading your retries, over 20% of payment issues can be solved without bothering your customers.
There are two types of card declines:
- Soft (Temporary)
- Hard (Permanent)
Issues like a spending limit can cause a temporary failure. Given enough time and retries, this can be resolved without requiring your customer to do anything at all.
On the other hand, things like fraud or an entirely new card do require action.
Treating different failure reasons differently is key to improving the customer experience when resolving failed payments.
That means your customer doesn't need to input a new card. Which means you don't need to send them a dozen dunning emails.
Try the card a few more times, and save those dunning emails for situations where they're really needed.
Final Thoughts on Send The Perfect Dunning Email
Focusing on the customer experience is key to maximizing your recurring revenues. Every interaction your business has with a customer is a chance to go above and beyond to create a pleasant, seamless experience.
Dunning is important because the relationship between the company and the customer is on the line. When we forget to put the customer first, we jeopardize our recurring revenues, and chip away at the retention work we’re doing elsewhere.
If you can avoid sending a dunning email, start there.
If you do need to send dunning emails, streamline the process as much as possible. Make it easy for your customers to choose you again and again.
Want to send fewer dunning emails and reduce overall passive churn? See how Churn Buster can help.