Archive for the ‘Relationship Management’ Category

How to Convert Customers into Referral Sources

Monday, July 10th, 2017

Would you like to turn your customers into referral sources? Wait, that sounds too boring. Not just referral sources, but evangelists who market your brand for you (and for free).

That’s the goal.

But is it a realistic and attainable goal? Can you truly get your customers to advertise your product to their own circles of influence?

Absolutely! In fact, word of mouth marketing is the most important type of marketing you can get, and you can get it. Let’s discuss how to convert your average customer into an effective marketer for your brand.

Need help asking for referrals? Check out this list of resources.

Focus on Your Customer Service

First things first, you need to develop a strong customer service policy. There’s no use doing any of the other things on this list if you don’t have a friendly, helpful, accessible, and responsive customer service team at the helm.

By ensuring your customers’ success with your product, you’ll groom them into excellent referral sources.

A lot of businesses pour so much effort into marketing and pulling in new customers that they neglect the ongoing and essential work of keeping customers happy. Happy customers engage with your product and are more likely to tell their friends about you. But it doesn’t happen without an intentional customer service and success strategy.

Simple strategies, such as following up on help desk requests or sending educational emails on new features, can strengthen your business/ customer relationship. Prompt responses, especially when delivered via live on-site chat, can show your customers that you care and are worthy of their endorsement.

For more strategies on how to improve your customer service, check out these posts:

Develop a Referral Rewards Program

Once you have rock solid customer service and success teams in place, you’ve got to ask yourself this question:

How will we reward our customers for their (free) marketing?

Although some of your customers will refer your brand without any incentive from you, that’s not something you can depend on. If referrals happen organically, that’s great. But, more than likely, any major referral marketing will need a push from you, the brand, to get it started.

When you incentivize referrals, you motivate customers to act. They know that by sharing your product with their social circles, they’re not only providing valuable information, they’re also getting paid for their efforts.

Referral programs are used in every type of business, from Google to your local gym.

But remember that incentive doesn’t necessarily mean cash. While cash may be the quickest way to your customers’ hearts, there are other, equally successful ways to incentivize your referral program.

For example, you can offer discounts on future purchases, thereby increasing the lifetime value of your referring customer. You can also offer free swag, such as branded t-shirts, pens, baseball hats, or coffee mugs. Swag has the added bonus of marketing for your brand whenever in use.

Ask Early

Ask for referrals when your customers are the most satisfied with your brand. Customers are usually the happiest and most engaged immediately after doing business with you. You’ve convinced them, they’ve bought in, they’re optimistic. It’s your chance to seize the moment.

So, after the customer purchases from you, jump into action and ask your customer for a referral. If you have a referral rewards program in place, be sure to invite them to join it.

You can ask simply in an automated email. It doesn’t have to be a big, lengthy production. It can be a few sentences along with a link to your set-up referral landing page. In your landing page, provide your customers with all the information they need to direct referral traffic back to your site.

Prep Them

Piggybacking off of the last point, it’s crucial that you prep your customers in the fine art of referral.

It’s not really that complicated, but for some people word of mouth marketing comes naturally, and for others, not so much. Some people don’t know how to tell others about you. That’s why you should come prepared with a script that they can use to tell people about your service.

On your customer referral landing page, embed share buttons for social media and email. Include a pre-written script that your customer can use, minimizing the need for them to come up with their own content. The easier you make it, the more buy in.

Run a Contest

Have you considered running a contest to build word of mouth marketing?

With a contest, you can excite your customer base while reaching prospective customers who’ve never heard about your brand. It’s like a two for one special.

When creating a contest with the goal of getting referrals, keep it simple and focused. In a simple contest, reward the customer who brings in the most referral traffic with a brand-related prize (i.e. give away your own product).

But don’t let any of your referring customers leave empty-handed. Everyone who participated and added new prospective customers should be acknowledged and rewarded for their efforts. Here’s another opportunity to gift free swag or offer special discounts.

Be sure to advertise your contest well. Email your current customers and get them excited about your contest. Advertise on your website via pop-ups or banners. Share it on social media. Add it to your email signature.

And then, after the contest is over, do it all over again. You can run multiple contests every year because there’s always someone else who needs to know about your product.

Create Content That’s Shareable

Exposure is huge for brands.

It’s estimated that nine out of every 10 people who are exposed to your brand won’t purchase on the first interaction. They may check out your products and even sign up for your email list. But the work of converting prospects to customers is through the process of lead nurturing.

You can nurture leads through your referral sources, too. My favorite way to do so is through creating valuable content that your referral sources can share with their social circles. From blog posts to case studies to beginner-friendly guides, take time to create educational content for the purposes of sharing and establishing trust with prospective customers.

Producing this type of educational, sharable content allows you to position yourself as a credible expert. It also gives your customers another reason to talk about your brand to their friends and family.

Include Reviews on Your Site

Reviews are word of mouth marketing, too. While onsite reviews are not the active “go out and tell” type of marketing, they do convert prospects into customers. That’s because people rely on the advice of others. A simple recommendation or criticism from an actual customer has more sway than glossy advertisements or even an entire marketing department.

I recommend allowing customers to leave product reviews on your website. This serves two goals:

  1. Good reviews can convert prospective customers
  2. Reviews are social proof that others have tried your product

By the way, don’t worry if you get a few less than stellar reviews. Prospective customers are more likely to trust products that receive a few mixed reviews over products that are universally loved. Universal love is always suspicious.

Testimonials also fit into the review category. Create a dedicated page for your testimonials, add them to your home page, and your product’s landing page. Include testimonials in your marketing materials and your social media outreach. Share case studies with your email list.

Use the words of your current, happy customers to reach new, prospective customers.

Additional Resources

Before you go, check out these related posts:

Don’t forget to download our list of resources for getting more referral business.

The Value of Checking in With Your SaaS Clients

Monday, December 26th, 2016


What if we told you your SaaS is potentially missing huge opportunities to grow revenue?

Most SaaS aim to grow revenue and customer retention, but many seem to be missing an obvious link there improved customer retention can be the key to growing revenue. Annual recurring revenue is a measure we should all look to improve, yet a McKinsey study (outlined here by Kissmetrics) showed that 80% of companies are growing ARR at less than 10% per year.

That’s a lot of missed opportunities.

As we’ve discussed previously, focusing on customer success should be a priority for companies who want to improve retention rates, so what are SaaS doing to check in and involve clients in the process?

How do you segment customers? Get our quick ideas here:

Segment Customers

Customer segmentation is important for more than just targeted marketing; it’s a good way to ensure that you are genuinely gathering feedback from different groups of people.

Create some kind of matrix detailing your customer population and make the effort to include each different group when gathering feedback. The temptation can be to focus on customers who are outspoken about how happy they are and look for ways to pat yourselves on the back, but truthfully, you need the neutral, average or negative feedback too if you really want to make improvements.

You should value your vocally annoyed customers just as much they can be a source of valuable insight, though beware of putting too much stock in anything a serial moaner has to say. It may be that they’re just unusually negative and are the types to nitpick over anything. First be sure to understand whether your SaaS is really suited to their purpose in the first place.

“Vocal customers can be an absolute wealth of knowledge. These vocal customers tend to analyze and nit pick every encounter or product error they have with your company. This information is gold! How many surveys, beta testers, phone calls, and customer panels would it take to uncover all of the nuances they bring to the surface without you having to ask?” ( Client Success)


Photo credit: via VisualHunt

Worry about the silent ones

As Teresa Becker points out for Client Success, you should worry more about those customers you don’t hear a word from, whether good or bad. “When your customers are silent, you have no idea what problems they’re encountering, what frustrations they have, or even if they’re using your product in the first place. Silent customers may be pleasant to have throughout the year, but what about when renewal time comes?”

This means that it’s always a good idea to deliberately seek those customers out for feedback. You don’t want to be caught by surprise come renewal time. Take steps early to make contact and ask them how things are going “silent cancellations” can be a real problem so you’re much better off making an early move.

Identify Red Flags

Have you figured out what customer success milestones should look like for your SaaS? These are the events, actions or achievements a customer should have made with your app in order to see success from it. You should be tracking whether each customer is meeting those milestones and flagging any who are not this is a possible red flag that the customer might be heading toward cancellation.

This is a premise behind tools such as Retained you need to be able to identify customers who are in danger of canceling as soon as possible before they reach that point. Tools like this make it easier for you to analyse the possibility without having to manually go through piles of data.

What might a red flag look like? Here are a few examples SaaS are using:

  • Customer hasn’t logged into the app for a certain period of time.
  • Customer usage pattern is decreasing.
  • Customer hasn’t met key milestones.
  • Customer has not been opening emails.
  • The account is overdue and the customer isn’t opening emails.
  • The account could save money if they upgrade (particularly if overages are involved).

How Will You Check In?

It’s all very well to talk about the importance of checking in, but most SaaS are busy just keeping up. How can you ensure that your communications with clients are effective? Here are some of our thoughts on checking in effectively:

#1. Make it part of your culture

It’s up to you to set the desired culture in your SaaS from the beginning. Make seeking and acting on customer feedback a priority that is engrained into how things are done. Of course not all feedback will be useful and neither can you act on everything, so develop a system for managing and assessing feedback as it pertains to the overall goals and purpose of your SaaS. Customers will appreciate it when they recognize that you are prepared to act on feedback.

#2. Actually talk to people

We live in a digital world where it can be tempting to rely on electronic forms of messaging for everything we do. The thing is, people are so bombarded with emails and other messages that they’re often going to ignore or put off responding to them. On the other hand, people who are willing to pick up the phone or meet in person will often get a better response.

Susan Payton wrote a post for Mashable a while back where she described different forms of feedback-gathering and their relative effectiveness for companies. While methods such as in-person panels or one-on-one calls may be the least cost-effective means, they tend to be the most effective for gathering raw, actionable feedback.  The more you understand about your customers through direct means, the better you will find your ability to produce meaningful results.

#3. Require churn feedback

Obviously, if you’ve really lost the customer and can’t salvage them before their access expires, you’re already at the point of “too late” with them. This doesn’t mean you shouldn’t do everything possible to get their feedback, no matter how much it has you wincing to do so.

Many SaaS still operate with churn feedback being optional, but others such as Cashboard opted to make churn feedback compulsory. It’s a bit of a double-edged sword of course you can get some less-than constructive feedback when people are forced, but overall, they felt that the feedback they got made it worthwhile. It’s possible that by requiring the feedback, you may even be able to do something to retain the customer before it’s too late.

#4. Gather in-app feedback

There’s nothing like getting feedback from a customer while the experience is still very fresh in their minds. Prompting users in-app to provide feedback can generate some excellent contextual ideas or iterations.

How do you segment your clients? Here are some quick ideas:

Final Thoughts

Is your annual recurring revenue figure growing? This measure shows how well you are doing with retaining customers and represents a huge opportunity.

Churn is costly to SaaS and is often preventable with the right structures in place, including checking in regularly with customers and developing a culture of valuing customer feedback.

What can your SaaS implement today to improve feedback frequency and quality?

How to Deal With Negative Feedback in Your SaaS

Monday, November 14th, 2016


You can’t be friends with everyone.

Some people aren’t going to like you. Some customers will walk away disappointed.

These are the realities of running a business. It doesn’t matter how strongly you prioritize customer service and customer success, some customers are going to complain.

Young startups feel this the most. They only have a handful of customers, so a few complaints are a blow to their egos. They can’t turn to a user base of thousands for assurances. Plus, resources are tight. They can’t provide as much of their attention as they would like.

But that doesn’t mean that negative feedback should be ignored.

Your customer service policy should be a carefully designed plan. Download our free guide to learn how to create yours.

All Feedback Is Useful

Anytime a customer or user takes the time to send you feedback, you should rejoice.

Sure, sometimes the customer will be upset. They might even be angry or use unconstructive language.

Just keep in mind that the customer is giving you an opportunity to learn; an opportunity to improve your product. If you can set your ego aside and critically look at your product and business, any bit of feedback can be used to strengthen your SaaS.  

Positive feedback is encouraging, but it rarely helps. You already know what you’re good at. Negative feedback, however, points you at the areas you can improve. A complaint is a big neon sign that says “FIX THIS TO MAKE MORE MONEY.”

You’re likely familiar with the Lean Startup methodology. The build-measure-learn feedback is an exercise most SaaS businesses use to improve their product. User feedback is a big part of the “learn” phase of product iteration.



The beauty of software is that you can change the product in response to complaints. So unlike physical products where negative feedback is best minimized and handled quietly, SaaS complaints are a chance to make your product and service better.

Understand the Complaint

Before you can take steps to respond to negative feedback, you have to understand why the customer is complaining. Something made them upset. What triggered the behavior?

In many cases, the original complaint will tell you everything you need.

Let’s say a customer signed up for your payroll software, but didn’t realize that you specialize in helping small businesses. His company is too large and requires elaborate features that you don’t provide. He may label you “ineffective” and “unfinished.”

It’s obvious from his complaint that his challenges are real. He is frustrated because he purchased a product that doesn’t help him. You could dismiss the customer as a poor fit, but that doesn’t help anyone. Instead, use his feedback to improve your marketing (perhaps your website copy) to make your product’s intended use more clear.

In other cases, customers won’t be as clear. They’ll fail to provide details and use general words like “disappointed,” “unprofessional,” and “dissatisfied.” These complaints don’t help you solve the customer’s problem or improve your product.

If you don’t feel that the customer has provided enough information, ask for more. Don’t be condescending or overly suspicious, but don’t admit fault or apologize until you know the full story.

Respond Respectfully

When we’re emotionally investing in something, we have a tendency to take negative feedback to heart. Resist this urge at all costs. Respond to the feedback quickly, but not immediately. Give yourself and the complainer at least two hours to cool off. (Exceptions apply here. If the customer is experiencing severe hardships – like revenue loss – get on the phone.)

Always respond in an intelligent, thoughtful manner. You care what they have to say, so make sure the sentiment comes across.

If you are replying publicly, be especially cautious (email is considered public; it’s easy to forward around). Speak in terms of solutions, not problems. Make sure to thank the customer for the feedback, no matter how much that sentence hurts to write/say. All feedback is a gift.

Sometimes a customer will be wrong. They’ll misremember, misread, or insist that you help them in a ludicrous manner. If you assessed the situation objectively, it’s alright to correct the customer. Don’t feel the need to apologize for everything, but recognize that sometimes it’s smart to rectify a problem that isn’t your fault. In many cases, solving unrelated problems is a big part of customer success.

A few days after you have proposed a solution, follow up with the dissatisfied customer so they understand that you genuinely want to solve their problem. Ask if they have taken your advice or used your solution. Offer further help. If they don’t reply, don’t harass them.

Even if you can’t provide a solution, respond anyway. The service recovery paradox is when a customer thinks better of a company after the company has apologized for a mistake than if the company had never made the mistake in the first place. It doesn’t work for big failures and it doesn’t work repeatedly for the same customer, but a failure on your end does not instantly end a relationship.


A Harris Poll survey found that responding to negative feedback online is a smart tactic. 33% of people who leave negative reviews online will post a positive review if a company responds, and 34% will delete their original review. The key is to respond quickly, accurately, thoughtfully, and address their complaints.

Improve Your Business

Once you have handled a complaint, your work isn’t finished. You need to catalog them so you can identify patterns.

Complaints will rarely be uniform, but they can often be solved with similar solutions. Let’s return to our example from before – the customer who wasn’t a fit for your payroll software. Perhaps you had another customer who misunderstood your product for accounting software, or a customer who wasn’t aware she could only list 15 employees.

In our example, each complaint is different, but they share a commonality: The customers purchased your software without understanding it. You should adjust your marketing to better educate your customers. This solution won’t help the complainants, but you’ll prevent future problems.

Keep in mind that anytime a customer sends negative feedback, there are several more who choose to say nothing. According to Help Scout, “a typical business hears from 4% of its dissatisfied customers.” They’ll think it. They’ll tell their friends. But they won’t come to you. The smart solution is to fix whatever triggered the poor feedback so it stops happening.

Create a Feedback Process

Smart businesses use processes so they don’t solve the same problems over and over.

Create, document and implement a system to deal with negative feedback, especially if you have a large team. The process should tackle negative feedback immediately in a consistent manner.

As CSM Wire suggests, this feedback process should integrate with your customer success team. “The customer success team should also develop a library of standard messaging that can be quickly accessed during an urgent situation. Standard update and maintenance communications can be customized as necessary.”

Feedback is so important, in fact, that seeking feedback should be a part of your process. Social media is a good tool for this, but it’s also smart to build features into your app for immediate communication, like live chat, review prompts, and popup surveys.

You can build a customer service policy that deftly handles negative feedback and turns those customers into loyal fans. Download our guide to learn how.

The Takeaway

The key to handling negative feedback is to not sit idle.

If you receive feedback and fail to address it, the likelihood of churn skyrockets. Even if the problem wasn’t a big deal to the customer, your unwillingness to address it exacerbates the problem. Suddenly the customer feels unappreciated and unvalued. Instead of a polite “I need help” email, the customer publically criticizes your company on social media. Not good.

If you respond to your upset users and continually refine your process for handling feedback, you’ll retain users and squash your churn.

Engaging SaaS Customers with Targeted Content

Monday, September 5th, 2016


When you consider content marketing for your SaaS, what immediately springs to mind?

For many SaaS, content marketing is seen as a lead generation strategy, a way to generate interest and effectively “prove” their expertise to potential customers. This is a great idea, but if you’re not looking at content with a view over your entire customer lifecycle, you’re possibly missing out.

When you think about it, at any given time you have customers who are at various stages of their journey with your SaaS and these customers have different needs and desires when it comes to content.

If your view of content is more of a “one-size-fits-all” approach, you risk becoming irrelevant to those who are at different stages. This is where targeted content comes in…

Need content ideas for your SaaS? Grab our ideas list.

Why Targeted Content?

Targeted content means that you deliver relevant content to the right people at the right time. For example, if account records show a customer just took a certain action with you or reached a particular milestone, you might send them content which pertains to taking the next step.

To get an idea of what content and when, you’ll usually need to create content which falls under each of the phases of a typical SaaS marketing funnel:

Awareness Stage

Awareness or “top of funnel” is the stage where prospects have some kind of problem or need they’re searching for a solution for. They’ve come across your solution either via search or because they’ve heard through the grapevine that you can take care of their problem.

The usual content strategy at this stage is to provide them with a broader view of information that is relevant to their problem, or possibly to help them discover a need they didn’t realize they had (this stage may also be referred to as “discovery”). This is not usually the stage to share deep, analytical information about your solution because the prospect isn’t ready for that yet.

Middle of Funnel

At this point, the prospect is familiar with the problem and probably aware of multiple possible solutions besides yours. They’re in the “consideration” phase, looking into deeper research to determine which solution is going to be the best fit for them.

Middle of funnel content should establish you as an authority within your industry and help guide the prospect through their research. You want to establish trust and provide information specific to your solution, such as what makes you unique.

Content here may also include knowledge base topics or how-to videos; your prospect wants to know how your product works and preferably be able to see it in action to determine whether it is easy to use and has an attractive interface.

Bottom of Funnel

This is the stage where prospects are ready to make their final decision to purchase—the “conversion” stage. They will be looking for evidence that solidifies their decision to go with your SaaS such as social proof, free trials or guided demonstrations.

You might use case studies and testimonials, webinars or “master classes”, all designed to demonstrate the value of your SaaS and how customers can get the best from it. If your SaaS uses a customer success or sales team, you need to be looking at how your content at this stage supports their efforts too.


This is the next part — the “flask” into which your marketing funnel flows. We like this example as demonstrated by Moz because it is one of the few funnel examples which emphasizes the importance of not forgetting about the next stage of content.


For SaaS, keeping churn numbers low is a critical metric, so it’s important to make a plan which includes content for retention of current customers. The aim is to keep the customer engaged and continue to deliver something that is of value to them.

Content at this stage might include tips for getting the most of your software, how-tos, user case studies and email newsletters for subscribers.

Start by Tracking

If you want to get better at providing targeted content, you need to begin tracking usage data and segmenting customers based upon activity.

You need to understand your customer behaviors and preferences so that you can create content which is useful and relevant to them. For example, if you notice that current customers reach a certain milestone then tend to go quiet, you can focus on “next-level” content which will help them realize new heights of value.

Of course, this works when you have registered users to track. For prospects who are not yet registered, monitor the analytics for the content you are putting out and figure out what is working for getting people into your free trial. If you’re not sure what content to start with, ask people! You can only track if you’ve started with something…

Some Examples

It’s all very well talking about targeted content marketing in theory, but what does it look like when done well in practice? “Done well” is the caveat to success for any content marketing strategy; with the amount of content already being put out there, yours needs to stand up and count among the noise.

Here are some SaaS-based examples of content at different stages:


CrazyEgg uses strategies so simple, they’re genius. If you’re a newb arriving on their website for the first time, this is how you’re greeted:


Easy, intriguing and immediately relevant content. Who doesn’t want to know precisely how users are interacting with their website and what they might be able to improve?

This kind of gateway content provides value to the individual immediately and helps to drive awareness of the problems they should be monitoring for. It helps to endear CrazyEgg to prospective customers because they’ve already received something useful which helps to highlight the expertise CrazyEgg can offer.


HubSpot is a regular purveyor of multiple types of content. When it comes to middle-of-funnel, they have got some simple solutions for prospects. Take their marketing automation solutions as an example; if you’ve reached the consideration stage there, you might be offered a quick tour to see what makes it tick. As an aside, they also offer live chat as you go through that process so prospects are able to ask any questions immediately.



Do you have some good customer stories to tell? Netsuite makes the most of these to produce some “conversion” content that is relatable to prospects and sells their product well.



Moz are another example who are content machines at all levels of the funnel. Their content is a huge asset to them because they continue to deliver valuable insights, including those aimed at people who are at a more advanced stage in their customer lifecycle.

If you’re looking for the next strategy to spice up your results, Moz probably has it either in their blog or included in their in-depth beginner’s guides.


What types of content should your SaaS produce? Check out our list:

Final Thoughts

If you want to make content marketing really work for your SaaS, then taking a targeted approach is a good strategy. While you might get some good hits by blanketing content and aiming at all levels of the funnel, it is much more powerful when you are able to be relevant to the stage the individual customer is at.

Start by knowing the different stages of the marketing funnel and what types of content work for each. Track user activity and content analytics, ask customers what they’re looking for and create more content to suit the stage of the user.

Targeted content is an opportunity which many are now grabbing. Get your SaaS onto it and boost your chances of getting and retaining the right customers.

How SaaS Should Manage Dunning

Monday, June 27th, 2016


As SaaS your business is built on a recurring revenue model, right? The chances are you’d like that revenue to keep recurring with as few interruptions as possible.

It all sounds quite simpleattach a payment gateway, get subscriptions and (besides your app upgrades and maintenance) wait for the cash to keep rolling in. In reality, things tend to get much more sticky.

What do you do when a customer payment doesn’t go through for whatever reason?

What should you have in place pre-dunning? Grab our checklist here.

What Is Dunning?

“Dunning” is the term used to describe the process of communicating with clients whose transactions have failed prior to their accounts being cancelled.

The primary objective of dunning is always going to be to preserve your revenue sources, but as the whole thing is a communication process, it can serve other purposes too. For example, it can help you promote your app so the customer understands what they’ll miss out on, find out from customers if there is any problem you can help them with and generally help you to foster a relationship with them.

Remember, they’re not necessarily “bad” customers…

Have you ever had to have a credit card cancelled for any reason? What about simply an update to the account details associated with the card? There are a number of reasons why a credit card transaction may be declined and many of them don’t involve “the customer didn’t pay their bill.”

For example:

  • Change of billing address with associated credit card.
  • The credit card expired.
  • The card was cancelled due to fraudulent activity.

It’s worth remembering that you could have many good customers who have a payment issue come up on their credit card and that the dunning (or pre-dunning) process can be worth the effort.


Yep. Sometimes you know ahead of time that there’s going to be an issue with the payment, right? Like when the expiry date of the card on record is coming up due. Pre-dunning involves sending out emails reminding the customer to update their credit card details ahead of time. It tends to be easier to pre-empt a problem and get the new details rather than chase up failed payments.

There are some tools you can get which automate the pre-dunning and dunning process (such as Stunning for Stripe users). These save you the time and trouble of manually chasing up expiring credit cards or credit card declines by sending out automated emails.

Tips For Managing Dunning


As mentioned, we highly recommend that you find an automated software to take care of dunning for you. The thing is, unless you’re constantly poking into the accounts side of your business (who has time?), you won’t know someone’s credit card is about to expire ahead of time.

A primary measure of SaaS is churn, and failed payments can be a substantial cause of that churn. The thing is though, just because a customer’s payment has failed doesn’t mean they’ve already churned. For now, they still have an active account which could still be salvaged, which is why it’s important to have that dunning process in the first place.

Give the benefit of the doubt first

Remember all those possible reasons a card can decline? Sometimes it even happens at random and can be resolved simply by trying again later. This means you don’t want to be dealing with the customer in any way which might ruin the relationship.

Hold off on actions such as freezing accounts until you’ve give the customer plenty of opportunity to rectify the situation. Many SaaS are using a period of up to 21 days grace to make contact with the customer and give them the opportunity to get payments going again first. It’s about striking that balance between too lenient and too tough.

What to look for in a dunning system

You already know you want the process automated. It makes sense that you put more focus into growing the business and serving your customers well rather than doing a task which can be handled on autopilot with a few emails.

Here is what you should be looking for in a dunning system:

  • Automatic retries – For all those times when a card declines one minute, but will be accepted the next. You want a system which retries intelligently at times which give you the best chance of recovering revenue.
  • Pre-dunning intelligence – The system should look for things like upcoming credit card expiry and automatically send out emails to remind the customer to update their details.
  • Payment reminder emails – You want customers to be reminded that they have an upcoming payment. If they’ve just cancelled the old credit card, this may be enough of a reminder for them to update their details.
  • Customizable emails – You want to be able to add your own branding and “language” to the emails.
  • Automated dunning emails – When there is a credit card decline, the system should automatically kick in to trigger emails.
  • Automated follow-up – The system should be intelligent enough to know whether the customer responded to the first email and should only send out emails based on need.

This is a minimum list of requirements – you will find that some apps available have a whole lot more features which are useful to add on.


Best practices for email

Half the battle with sending any kind of email is ensuring it gets opened and read in the first place. If your SaaS wants to manage dunning well, we have a few suggestions for those emails:

  1. Send them from an address which customers are able to reply to if needed. This way you open the dialogue easily for any questions.
  2. Have an obvious subject line (for example: [Name of SaaS] Please update your billing information).
  3. Tell the customer why the transaction failed – it can save the mini-panic moment if you’re telling them it was simply due to an expired card.
  4. If possible, use a direct link to get them to update their billing information. You want to make the process as seamless as possible, so cutting out clicking around and logging in where you can.
  5. Stick to empathetic, professional language. Be clear about what’s happening, but don’t take the tone of “making a demand.”
  6. Let them know when you’ll attempt to collect payment again and what will happen if it is unsuccessful.
  7. Remind them of the value your app delivers for them. You don’t want a customer thinking “meh” after reading your email, you want them to have a sense of urgency about not losing the fantastic benefits you provide them. You could even introduce them to new or upcoming features: “we wouldn’t want you to miss out on …”
  8. Send out more than one email. Crowded inboxes have a habit of burying emails, so your chances are better with multiple communications. We usually send out three across the space of a week.
What should you have in place pre-dunning? Grab our checklist here.

Final Thoughts

Dunning is actually one of the most simple revenue-rescuing strategies you can put in place, especially if you choose the right kind of automated software.

We’d consider dunning activities to be a basic requirement for SaaS who are keen to reduce churn and preserve that recurring revenue.
Remember, your customer hasn’t actually churned yet just because their payment hasn’t gone through. There are a number of legitimate reasons credit card payments fail, so give them the benefit of the doubt, treat them with respect and give them the chance to get back on track.