5 years ago, it was a good idea to give customers a heads up 30 days, 15 days, 3 days before their card expired. Grandpa called it “pre-dunning.”
Pre-dunning messages might say things like "Your credit card is expiring soon" or "Update your credit card before it expires".
The experience of these notifications felt spammy and aggressive, but you could get in front of billing dates before the inevitable happened: failed payment, and service interruption. Which is a killer for subscription and saas companies.
Today, Stripe accounts (and many other payments platforms) include something called Card Updater. It communicates with Visa, MasterCard, and other card issuers to update expiration dates automatically. It’s not even fully implemented worldwide, and already effective for over 70% of cards that look like they’re going to expire.
Yeah, it’s freaking AWESOME for subscription payments.
If you use Stripe, and want to see Card Updater at work…visit this link to see all the card updates happening in your account.
Let’s say you are sending pre-dunning emails to warn customers their cards will expire without their prompt attention…
For every 10 customers you email, 7 would have completed a successful payment.
In an alternate universe without pre-dunning: the charge goes through fine, and their recurring billing doesn’t skip a beat. Seamless and low friction, as subscriptions are designed to be.
Interrupting 70% of these customers will provide zero value at best.
How many emails does your support team get about card updates from confused customers?
How many customers are getting emails about billing issues, when they could be getting emails about how awesome your product or service is?
And how many customers are cancelling because you emailed the wrong point of contact—someone who doesn’t know your software is actually in-use by the team? (This happens surprisingly often.)
However, if you’d still like to get in front of your customers before their billing date, we’d suggest friendly messaging that adds value, and letting Card Updater work its magic.
Note: Churn Buster offers pre-dunning as a feature, and we have recommended it in cases where the cost of supporting a delinquent customer is exceedingly high. For example payment plans, where value has been delivered up front and money is owed as debt.