Dunning messages – the basics: What they are, when to send them and how to write them


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  1. Introduction
  2. When do you need to send a dunning message?
  3. Why dunning messages are important
  4. How to write dunning messages: A step-by-step guide
    1. Step 1: Prepare the basics
    2. Step 2: Choose the tone
    3. Step 3: Structure the message
    4. Step 4: Consider the method of delivery
    5. Step 5: Timing and frequency
    6. Step 6: Keep records
    7. Step 7: Legal considerations
    8. Step 8: Offer payment solutions
    9. Step 9: Final notice
    10. Step 10: Evaluate and adjust
  5. Best practices for writing dunning messages
    1. Clarity and transparency
    2. Neutral tone and empathy
    3. Providing options and support
    4. Firmness without force
    5. Data-driven optimisation
    6. Personalisation tips
    7. Additional best practices
  6. How Stripe can help

Dunning messages are communications that businesses send to customers to remind them about overdue payments or notify them of failed transactions. These messages are an important part of accounts receivable management and a common tool for businesses with recurring billing models, such as subscription services. Dunning messages benefit businesses by helping to prevent customer churn – especially involuntary churn.

When executed thoughtfully and strategically, dunning messages can deliver a positive customer experience, ease dunning management and create a lasting brand affinity. Below, we'll look at how to do this.

What's in this article?

  • When do you need to send a dunning message?
  • Why dunning messages are important
  • How to write dunning messages: A step-by-step guide
  • Best practices for writing dunning messages
  • How Stripe can help

When do you need to send a dunning message?

There are many situations in which a business may need to send dunning messages to customers, including:

  • When a payment is overdue: This is the most common reason to send a dunning message. If a customer has not paid their bill by the due date, a reminder can prompt them to make the payment.

  • For recurring subscription services: In subscription models, businesses can send dunning messages to customers whose recurring payment methods have failed. These messages can remind them to update their payment information to keep their accounts active.

  • Before service suspension: In cases where non-payment may lead to the suspension of services, sending a dunning message beforehand can alert the customer to the impending action and give them a chance to rectify the situation.

  • After a declined transaction: Payment transactions can be declined due to a variety of reasons, such as insufficient funds or an expired card. Sending a dunning message after a payment is declined informs the customer of the issue and gives them the opportunity to request an alternative payment method.

  • For incomplete payment setups: Customers may start a payment process but not complete it. A dunning message can remind them to finish setting up their payment method.

  • Periodic account updates: Dunning messages can remind customers to update their account details, which is especially useful if the payment method that is on file is close to expiring.

  • To enforce updated terms: Dunning messages can be used to inform customers of changes to payment terms or policies, especially if they affect how or when payments are made.

Although the content of a dunning message will vary based on the situation, every dunning message should include certain key components:

  • Identify the sender clearly: Make sure that the message includes the sender's name, which would either be the name of your business or the billing department. This helps to establish trust with customers.

  • Customer information: Include the customer's name and any relevant account information. This personalises the message and lets the customer know that it's meant for them.

  • Specific details of the issue: State the reason for the dunning message, whether it's an overdue payment, a declined card or a need for updated payment information. Provide specific details, such as invoice numbers, dates and amounts due.

  • Clear call to action: Tell the customer exactly what they need to do next, whether it's making a payment, updating payment details or contacting customer service for more information.

  • Payment instructions: Provide detailed instructions on how to make the payment, including payment methods accepted and any online portals or links that the customer can use.

  • Due date for resolution: Specify a deadline by which the customer must take action. This creates a sense of urgency and helps to resolve the issue more quickly.

  • Consequences of non-action: Inform the customer what will happen if they do not take the necessary action. This may include late fees, service suspension or further collection efforts.

  • Contact information: Give the customer a way to get in touch with you if they have any questions or need assistance, such as a customer service phone number or email address.

  • A polite and respectful tone: Maintain a courteous and empathetic tone. This helps to maintain a positive customer relationship, even in the face of payment issues.

  • Privacy and security reminders: Remind customers not to send sensitive information, such as credit card numbers, via email. Instead, direct them to safe methods of communication or payment.

Why dunning messages are important

When looking at ways to develop an exceptional customer experience and nurture brand loyalty, it is easy for businesses to overlook transactional communications, including dunning messages. But little elements such as these do add up over time, and also shape a customer's impression of a business. Here is why dunning messages matter:

  • Maintaining cash flow: Timely payments are key for the financial health of any business. Dunning messages help to ensure that receivables are collected promptly.

  • Minimising bad debt: By actively pursuing overdue payments through dunning messages, businesses can reduce the amount of bad debt that they incur. This is important for maintaining a healthy balance sheet.

  • Improving customer communication: Dunning messages provide an opportunity for regular communication with customers. When done correctly, these communications can strengthen the business relationship, even in the context of debt collection.

  • Promoting customer responsibility: Regular dunning messages remind customers of their payment obligations and encourage a culture of timely payments, which benefits the both the business and the customer.

  • Identifying and resolving issues: Sometimes, non-payment stems from misunderstandings or errors. Dunning messages open lines of communication to identify and resolve these issues quickly, thus improving overall customer satisfaction.

  • Reinforcing payment terms: These messages reiterate the agreed-upon payment terms and conditions, and confirm that customers are aware of and adhere to these terms.

  • Demonstrating professionalism: Well-crafted dunning messages reflect the professionalism of your business. They show that you are serious about your financial processes and customer relationships.

  • Encouraging customer retention: By demonstrating to customers that you are handling potentially negative situations, such as late payments, with tact and professionalism, dunning messages can play an important role in retaining customers.

  • Providing legal protection: In the event of a legal dispute over payments, a record of dunning messages can serve as evidence that your business took the necessary steps to collect the debt.

  • Enhancing customer experience: Although it may seem counter-intuitive, effective dunning messages can improve the overall customer experience by providing customers with helpful information and options for resolving payment issues.

How to write dunning messages: A step-by-step guide

Typically, dunning messages are not long, but they still require planning. Here's a guide for writing effective dunning messages:

Step 1: Prepare the basics

  • Identify the customer: Make sure that you have the correct customer details, including their name and contact information.

  • Review account details: Confirm the specifics of the overdue amount, including the invoice number, total amount due and due date.

Step 2: Choose the tone

  • Professional and polite: Make sure that the tone of your message is courteous.

  • Gradually escalate: If further reminders are necessary, gradually become firmer in tone, but always remain respectful.

Step 3: Structure the message

  • Subject line: The subject line should be direct and make it easy for customers to find the message quickly – for example, "Reminder: Invoice #12345 overdue".

  • Greeting: Use a polite and personal greeting, such as "Dear [Customer name]".

  • First paragraph – state the purpose: Briefly mention the purpose of the email. For example, "I'm writing to remind you about the outstanding payment for Invoice #12345."

  • Second paragraph – provide details: Include specific details, such as the invoice number, the total amount due, the due date and late fees (if applicable).

  • Third paragraph – offer assistance: Indicate your willingness to help if there are any issues or misunderstandings about the payment.

  • Closing: End with a call to action, such as requesting payment by a specific date, and thank the customer for their time and attention.

  • Signature: Include your contact information in your signature.

Step 4: Consider the method of delivery

  • Email: Email is the most common method for sending dunning messages.

  • Physical post: Physical post can be used as a follow-up if customers don't respond to an email.

  • Phone call: In certain cases, a phone call can be more effective – and prompt quicker action – than an email.

Step 5: Timing and frequency

  • Initial reminder: Send the initial reminder shortly after the payment becomes overdue.

  • Follow-up reminders: Depending on the response, send additional reminders at regular intervals, such as weekly or bi-weekly.

Step 6: Keep records

  • Document communications: Keep a record of all correspondence for reference purposes.
  • Know the laws: Be aware of the laws and regulations relating to debt collection in your region to certify compliance.

Step 8: Offer payment solutions

  • Flexible options: If possible, provide payment plans or other solutions for customers who are struggling financially.

Step 9: Final notice

If necessary, send a final notice indicating the potential consequences of non-payment, such as legal action or reporting to credit agencies.

Step 10: Evaluate and adjust

  • Feedback and improvement: Analyse the responses and the effectiveness of your messages, and adjust your strategy as needed.

Best practices for writing dunning messages

How and when you deliver a dunning message are just as important as its content. Here are some best practices for writing dunning messages:

Clarity and transparency

  • State the issue clearly: Identify the overdue payment, including the invoice number, amount due and original due date.

  • Give context: Briefly explain the origin of the invoice (e.g. recent purchase, subscription renewal) to jog the customer's memory.

  • Avoid ambiguity: Use concise, straightforward language to eliminate confusion.

Neutral tone and empathy

  • Maintain professionalism: Use a neutral, respectful tone. Avoid accusatory or harsh language.

  • Acknowledge realities: Recognise that non-payment may not be intentional and could be the result of a change in the customer's finances or a technical glitch.

  • Show understanding: Use phrases such as "We understand that …" or "We're here to help" to build trust and to encourage co-operation.

Providing options and support

  • Accept diverse payment methods: Cater to a variety of preferences with online portals, phone payments and in-person options.

  • Present flexible solutions: Consider accepting partial payments, extending deadlines or finding alternative arrangements to meet the customer's needs.

  • Provide accessible instructions: Simplify the payment process with easy-to-follow steps for each method.

  • Create support channels: Make it easy for the customer to get in touch with questions or concerns.

Firmness without force

  • Emphasise the importance of payment: Use respectful but direct language to remind the customer of their obligations.

  • Focus on facts and consequences: Avoid emotional appeals or veiled threats. Inform customers about potential late fees or further consequences if the payment isn't received.

  • Maintain a courteous tone: Treat the customer with respect, even in the face of an overdue payment.

Data-driven optimisation

  • Track customer responses: Monitor how customers react to different formats, tones and options. Analyse the data to identify what works best.

  • Refine your methods: Use data-driven insights to improve messages. Tailor content and tone based on successful interactions.

  • Continuously improve: Review and revise your dunning strategy regularly, based on new data and customer feedback.

Personalisation tips

  • Address the customer by name.

  • Reference their payment history or purchase details.

  • Use a friendly and polite tone which reflects your brand's voice.

Additional best practices

  • Start with a friendly reminder before escalating the tone.

  • Use a subject line that describes the message content accurately.

  • Keep the message concise and to the point.

  • Provide multiple contact options for customer convenience.

  • Consider using a professional dunning service for complex situations.

How Stripe can help

Stripe gives businesses access to flexible dunning management support that can augment your own thoughtful strategy. Here's a brief overview of how Stripe can help with dunning management:

  • Advanced payment recovery tools: Stripe's dunning management includes sophisticated algorithms which analyse the best times to attempt payment retries, based on industry data and individual customer payment patterns. This method increases the success rate of recovering failed payments.

  • Customisable email templates: Stripe provides a range of customisable email templates that have been designed specifically for dunning communications. These templates can be tailored to match your brand's tone and language, thus providing a consistent customer experience. They also include placeholders for content, such as customer names, due amounts and payment deadlines, making each communication personalised and relevant.

  • Flexible payment options for customers: To reduce payment friction, Stripe provides multiple payment methods and currencies. This flexibility allows customers to choose their preferred payment option, increasing the likelihood of successful transactions. Stripe can also be integrated with a variety of billing systems, enabling easy updates of customer payment information.

  • Real-time alerts and notifications: Stripe's Dashboard features real-time alerts for payment failures and successful recoveries. This immediate feedback helps businesses to address issues quickly and keep track of dunning efforts.

  • In-depth analytics and reporting: Stripe provides detailed analytics on payment attempts, success rates and customer responses to dunning communications. Businesses can use these insights to further refine dunning strategies, identify common issues that cause payment failures and better understand customer behaviour.

  • Application programming interface (API) integration for customised solutions: Stripe provides comprehensive API support, which allows businesses to integrate dunning management processes into customised systems or third-party applications. This flexibility is particularly beneficial for businesses that require a more tailored strategy for payment recovery and customer communication.

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