One of the most overlooked aspects of any business is back-end payment failure. This is especially true for subscription based businesses, or any business that sells payment plans or operates a recurring revenue model. There is money walking out the back door of your business and you can find out exactly how much by looking at your monthly failed payment number. But the truth is, most business owners don’t know how much money they are losing, or they don’t spend enough time trying to solve the problem of failed payments and credit card declines. Why? Well, the misconception is that there is not big money to be found on the back end of the business to warrant the time, effort, energy. But if you really dig into the numbers I think you may be surprised.
The standard credit card & debit card failure rate across all industries is 10%. Which means, there is a very good chance that 10% of your top-end revenue is being lost to payment failures and credit card declines. What is 10% of your yearly top-end revenue? My guess is that this number is a bigger number than you want it to be. And if you have not put together a plan to address your credit card declines you can check out this blog post to find out what you can do right now to start recovering these failed payments.
One step you can take immediately is setting up an email sequence. If you have a CRM that allows you to set up an automated email sequence, all the better. But if not, you can find dunning software that will help you set up the automation you need. Recurly, Stunning, & Churn Busters are all great products to help you set up your dunning automation. These products will allow your business to respond to payment failures almost immediately with an email sequence, which is great place to start!
But before you get too excited there’s something you should know. 85% of dunning emails go unread. The reason? Well there are a few, but the main reason is because most of these emails are thrown together in a hurry, and are very obviously automated. How often do you respond to an email that has clearly been sent to you through automation? Not very often right? I know those emails are at the bottom of my priority list. So it is with your customers. The solution is to intentionally craft these emails in a way that makes them personal to your customer. Here are 3 ways to write better dunning emails:
Writing Better Dunning Emails Tip #1: Include Your Customers First Name In The Subject Line
Nothing is more personal than someone’s name. For your customer to scroll through their inbox and see their name written in the subject line of an email, will all but guarantee that the email will stand out. Especially when they see the email is from a business they recognize and trust.
Writing Better Dunning Emails Tip #2: Use Emojis
Another way to grab the attention of your customer is to use emojis. I know this may sound a little unorthodox at first, but emojis allow your email to stand out using what is called ‘optical disruption.’ Emojis break up the predictable pattern of text and breaks away from the whitenoise of an email inbox.
Writing Better Dunning Emails Tip #3: Use ‘Final Notice’
Everyone works better with deadlines right? I know I do. Tell me I have a year to complete a project and I’ll start working on it in December. There is nothing more motivating than a quickly approaching deadline. You can leverage this truth in your dunning emails as well. Establish a deadline for your customer and you will see better click through rates and response times.
If all of this sounds like more effort than you are willing to dedicate to this problem, then you should know that you are in good company. Most business owners don’t want to dedicate the time or effort required to adequately solve the problem of payment failure. And I don’t blame you. You should be spending your time focusing on the big picture and growing your business. This is exactly why we started a company called Gravy. We have years of experience recovering failed payments. And over the years we have developed proven systems and strategies that really work. We can do this for you, and at a fraction of the cost that it would take to hire a full-time employee to address the problem for your business. You can close the back door of your business today and start recovering 50-70% of your payment failures each month. We’d love to talk with you to see how we could help your business. Click the link below to book a free discovery call.