Finance & Billing
Definition
Dunning is the systematic process of communicating with customers to recover failed payments or past-due balances. Dunning campaigns typically include automated retry logic for card payments, escalating email reminders, in-app notifications, and eventual collections handoff. Effective dunning can recover 20-30% of at-risk revenue.
Key points
- Smart retry: attempt failed card charges 3-5 times over 2 weeks
- Email cadence: reminder → urgent → final → collections
- Recoverable vs unrecoverable churn: dunning reduces recoverable
- Best dunning combines friendly and firm tone
Example
Customer's credit card expires; monthly subscription charge fails. Dunning workflow: auto-retry at day 3, email reminder at day 4, SMS at day 7, final warning at day 14, cancellation at day 21.
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