How our automated billing software helps your subscription business in collecting revenue faster.Featured • May 06, 2021
Most subscription businesses are not happy. Do you know why?
It is because they are not getting 100% revenue from their customers.
Subscription businesses make a lot of effort to provide customers with the best services. At the end of the month, a few customers do not pay their bills. This means the business has lost revenue.
Let’s understand this via an example:
John Doe Subscription business statistics:
Total Customers – 1000
Monthly fee - $10 (Annually it becomes $120)
John Doe Subscription buTotal non-paying customers per month – 50 that equals $500. (Annually, you lose $6000 worth of revenue)
John Doe’s subscription business has 95% of customers that drive revenue. Since 5% do not pay on time, he loses $6000 every year, $12000 every 2 years, and $18000 for 3 years.
This is a lot of revenue lost. As this is not good for any subscription business, there comes a need for a strategy. This strategy must help you recover lost revenue quickly. Yes, we are talking about using dunning management strategies via automated billing software.
What is dunning in the subscription business?
Dunning is a method of communicating with customers informing them about non- payment. You can tell customers about due accounts and ask them to repay them. This method often helps subscription businesses recover lost revenue.
How can dunning help my subscription business?
Subscription businesses have tons of daily tasks to work on. It is not possible to keep reminding customers manually every second day to repay. It is tedious to keep track of such customers manually. That is where an effective dunning management strategy can help you out.
4 dunning management strategies you can use via automated billing software:
- Maintain a strict collection schedule:
Failed to receive the payment from your customer on the 1 st ? Try on the 3 rd , 5 th , and then on the 7 th date of the month. One of the best dunning management strategies is persistence. Send reminders every 2-3 days to customers who do not pay on time.
An ideal scenario will be to send 2-3 reminders to defaulting customers in the first week. You will recover lost revenue from most defaulters. This way, you stand to gain every month and grow your business.
- Use automated emails to notify customers of failed payments:
Using an automated email strategy works most of the time to recover lost revenue from customers. You can provide them with a payment link and a point of contact who they can call to complete payment. Such preventive measures will help your business recover lost revenue at a rapid pace.
An ideal scenario will be to send informative mailers to defaulting customers. You will send customers everything on this mail that will help them complete payment minus any hassle. This way, your customer will have a quick payment experience & you recover lost revenue.
- We find text messages to be faster & effective than emails:
Yes, you have read it right. Customers love their smartphones. They might not check email regularly but will definitely check text messages. If a few of your customers default on payments, send them text messages informing them about the default. You can send them payment links and a point of contact they can call to sort this payment.
An ideal scenario will be to send text messages every 2-3 days to defaulting customers. You will send such customers information that will help them complete payment minus any hassle. This way, customers pay their share & you recover lost revenue.
- Being proactive can help!
Customers use their debit/credit card details while applying for your subscription service. Sometimes, a customer cannot make payment on time as their card has expired. Re-applying will take a few days, and you will have to continue follow-ups until they renew their card and pay up their monthly fees.
An ideal scenario will be to create a list of customers whose card is about to expire. Send them an email or a text message stating their card expiration date. Ask customers to renew their card in advance or add details of another card for completing payment. This way, your business does not suffer, and you receive revenue on time.
- Data, Reporting, & Analytics can help too!
In this digital age, you can understand your customers in the best manner via data and analytics. Using insights, you can find out how often you collect payments in the first attempt. You can also find the percentage of customers that do not pay monthly/quarterly/annually and which follow-up strategy works the best when payments are late.
An ideal scenario will be to check reports every 3 months. This way, you will understand repeat customers that do not pay on time. You can create a specific dunning strategy and target this group rigorously to recover lost revenue. You can also offer an extended grace period, change follow-up tactics, and much more to improve customer experience.
One of the best ways you can recover lost revenue via dunning management is with ChargeMonk.
What is ChargeMonk?
ChargeMonk is automated billing software for subscription businesses. We help recurring business models recover lost revenue and manage their subscription business seamlessly.
How can ChargeMonk help your subscription business model?
Over the years, ChargeMonk has understood industry trends and all the daily problems that a subscription business can face. Keeping these in mind, we came up with the best subscription management software. This is an all-in-one solution for your subscription business that will help you save time, effort, and money!
If this is what you want for your secure subscription business, do connect with us today and get a FREE TRIAL! Click here for more details!