Dunning Management: Your Rollout Plan to Increase Retention

Dunning Management is an often overlooked aspect of Customer Success. It happens silently.
Actually, it’s less of what we’re doingand more of what we’re not doing. We effect change by action and inaction.
Where is your churn coming from? What is the breakdown of customers (and their respective dollars):

  • Voluntary churn (requesting to cancel)
  • Involuntary churn (payment method fail)
  • Merchant block (where they have their bank block payment to a specific merchant)

I’ve spoken with some SaaS companies who generally have great luck with credit card payment and very few merchant blocks, but have lots of customers requesting to churn. Others allow their credit card to fail to act as a means of cancelling the account. Some just call their credit card company because it’s easier to put a merchant block than request to cancel. 🤷‍♂️
In this post, I want to address:

  • What is dunning management?
  • Etymology
  • Why should I care?
  • Okay, I care, now what?
  • Whoa, this is a lot of work—maybe I’ll do it later
  • Can’t I just get someone else to do this for me?
  • What’s the ROI?

If you need the TL;DR version, skip down to the Can’t I just get someone else to do this for me? section. 

Disclaimer: I’m not being paid me to write this. I’m simply sharing my experience and what’s worked for companies I’ve worked and consulted for. The experiences below are for B2B SaaS firms.

Dunning management 

Dunning management is all about collecting what’s truly owed to you. It’s less obnoxious than reminding your friend that he still owes you $10.

Losing $10 to a friend — not so big of a deal. However, ten friends that each never repaid their $10 loan, now that’s becoming a problem. And that’s where dunning management comes into play. It’s the art of fixing payment processing issues such as canceled cards (often due to fraud), new cards (old one expired), and insufficient funds.


This is a fun one, because whenever I talk to anyone outside of SaaS they look at my like I’m from outer space. “Dun” or “to dun” is to collect payment. It was popularized around the 1600s as debt collectors went house-to-house collecting on loans. 

Why should I care?

Inaction is causing you to throw away money. Needlessly. We all have customers who decide they don’t want our product or service and cancel. That at least I can handle because they made a conscious decision to move on. Payment failure is something different. Sometimes those people didn’t want our services any longer, but most of the time they forgot to update their billing, they didn’t realize their card expired, or something else happened.

For example, years ago I had one customer who tweeted at our company about why he couldn’t access his account. It was an 8pm tweet, interrupted my evening, and I tweeted back to let him know I was looking into it. Sure enough, the account was inactive from failed payment. He didn’t realize it. I couldn’t simply tweet back, “hey, you need to update your billing.” Kindness matters.

Okay, I care, now what?

First, before you sound the alarm bells, go look at your churn breakdown for the last 3-6 months to know whether you really ought to sound the alarm. Using your billing system, reporting system, or whatever tools you have, figure out how much is actually going out the door due to involuntary churn. Is that your top priority? Even if it’s not your number one priority, is it high enough that it warrants you attention? Remember, once you establish a good system, it can run on its own. We’ll get to this down below, but a good tool can help you automate this process so you can put your mental energies elsewhere, like calling those customers who requested to cancel. 

Your steps are:

  1. Calculate ARR or MRR lost due to delinquent churn
  2. Evaluate your current process – is it effective? Could it be better?
  3. Ask yourself the question, “even if I only fix half of the delinquent churn, would that be a major victory for me?”
  4. Spend 4 minutes asking, “how could this be a better customer experience?”

Whoa, this is a lot of work—maybe I’ll do it later

Yeah, there’s a decent amount of work here. But run a quick calculation in your head. Even if it takes a total of 40 hours to research the issue, find a vendor, design the customer experience, and implement, would it be worth it?

Can’t I just get someone else to do this for me?

Yes and no. You can hire a consultant to help, or you can do it yourself. There are plenty of vendors to choose from, methods to set it up, and customer messaging to set up, but if you want to see a basic layout, then buckle up. This won’t work for everyone, but here are some suggestions if you have flexibility:

Billing system

Use Stripe as your billing system. It’s effective, scalable, and extremely reliable. Plus, you can plug in a ton of vendors into it. 

Revenue reporting system

Though we haven’t touched on this, but a great free product is ProfitWell. It’s terrific for tracking your monthly sales, downgrades/upgrades, churn, etc. It seriously saves me at least 20 hours a month — minimum.

They’ve got a great, friendly team willing to help and invest in you. Their base product is free, but they have several upgrades that charge a fee. However, many, many companies stick with the free version and really love it! 

Dunning management system

First, I would first turn on Stripe’s automatic credit card retry system (click of a button). This will retry their credit card up to 4 times over a span of several days. If this is the only thing you do and learn from this article, do this. 

Second, send email reminders to your customers when their credit card fails. If you don’t have time or need something for free, Stripe’s delinquent churn email reminders can work well. It’s basic and lacks extensive tooling and reporting, but can help get your off the ground. Make sure you push at least your customers’ first name and email address to Stripe!

If you want something sophisticated and more personalized, I highly recommend Churn Buster. There are several other vendors (Stripe, ProfitWell, Stunning, etc.) you should also look into. Note: there’s always the consolidation of certain players (i.e., billing systems) expanding their borders. Over the last two years I’ve seen most billing systems expand into areas like dunning management. Since that’s not their bread and butter — billing is — it’s up to you to decide if a single system is sufficient, or if best of breed is better for you.

I’ve helped SaaS companies implement different systems. One in particular was extremely frustrating and difficult to implement, and it’s no wonder people shy away from billing/dunning management! However, Churn Buster has a great, friendly team with a terrific product. They’re also affordable and have an easy cancellation policy if it doesn’t work for you. 
Their product shines because you can quickly link to Stripe and do a lot from there. Setup will take some time, depending on the size of your organization. It’s not plug-in-play, but don’t let that scare you off from saving recurring revenue.

Best practice: once a customer’s credit card fails, have Stripe run their repayment attempts for several days. If that doesn’t fix it, then have Churn Buster email the customer. You can build a cadence over a period of time (frequently 30-60 days, depending on the customer). This is critical as consumers tend to max out their credit cards around the holidays and payments fail because of that. Giving it 30 days can mean the difference of losing and saving a customer. It’s also important to send multiple emails in increasing levels of urgency.

A few other important things, set automatic retries before you send the next email to the customer. Nothing is more annoying than getting an email to update my payment info when I’ve already done that. With Churn Buster, that next customer email only goes out if the credit card failed. Here’s what the cadence looks like:

  1. Stripe retry (3-4 days)
  2. Churn Buster 
    1. Day 5 card retry 
    2. If above failed, then Day 5 Email customer (after card retry)
    3. If above failed, then Day 8-10 card retry
    4. If above failed, then Day 8-10 email customer 
    5. Repeat through day 30-60

It may sound like a lot, but I’ve been on vacation or traveling when something comes through. Like most people, I can’t read and act on every email within a few days (or even a week!), so don’t expect your customers to be any faster. Give them time.

Another key benefit is you get to write the messaging, make the branding your own, and white label the emails so they come from you (technically, you’re setting up the DKIM/SPF email records for authentication). 


Most dunning management software vendors will have their own default messaging, though you can often update it to be your own, in your voice. Some allow you to white label your emails, put your own logos on, and take off their branding (note: Churn Buster allows 100% whitelabeling). 

That said, if you need help with messaging, the cadence, or need someone to bounce some ideas off of, send me a message.

What’s the ROI?

The best is saved for last — so, really now, is this actually worth it? 

For the multiple companies I’ve helped implement a dunning management process, yes! Here are several outcomes I’ve personally witnessed. That said, remember mileage may vary — these are only averages from various companies, not what you will attain. Each company is different: some just use the smart card retry, some use the smart card retry and dunning emails, some have short or long collection periods, etc.

  • Reduced delinquent churn by 40% within 3 months of launch (a conservative estimate)
  • Recovery rate: 60-80% delinquent revenue
  • Smart card retries: accounted for 40-60% of saved revenue (see, just wait a couple days and retry the card!)

Ultimately, implementing these systems saved these companies money, but also paid for the vendors within several months. If you’re serious about company growth, you cannot ignore delinquent churn. It’s not a “nice to have.” Grow your company not just through your sales reps, but here, too.

Published by Jeff Beaumont

I love helping companies scale and grow their organizations to delight customers and employees, enabling healthy teams, fast growth, and fewer headaches. Scaling quickly is wrought with potholes and plot twists. When you’re running a company, losing customers, and employees are on their way out, and don’t have your systems running smoothly, then you’ll be at your wits' end. I've been there and hate it.

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