Dunning
The process of recovering failed subscription payments through retry logic and communication.
The process of recovering failed subscription payments through retry logic and communication.
Why It Matters
Failed payments cause 20-40% of all subscription churn (involuntary churn). A robust dunning process can recover 50-70% of these failures, directly impacting MRR retention. For a brand with $100K MRR and 3% payment failure rate, good dunning can save $1,500-2,000/month.
Practical Example
Scenario
A supplement brand has 5,000 subscribers at $50/month. Monthly payment failures affect 150 subscriptions (3%).
Calculation
Without dunning: 150 × $50 = $7,500 lost MRR. With effective dunning recovering 65%: $7,500 × 0.35 = $2,625 lost (saving $4,875)Result
Implementing proper dunning saves $58,500 annually in recovered revenue—likely more valuable than acquiring 100+ new customers.
In-Depth Explanation
Effective dunning recovers 20-40% of failed charges.
Pro Tips
- 1Retry failed cards on days 1, 3, 5, and 7—spread retries across different times/days as card networks have varying uptime
- 2Update expired cards proactively using card updater services before they fail
- 3Send friendly 'payment issue' emails with one-click update links—avoid aggressive language
- 4Offer alternative payment methods (PayPal, Apple Pay) for persistently failing cards