14 Dunning Best Practices to Boost Subscription Renewals

You spend a fortune acquiring subscribers to spend months on retention. Yet, nearly 50% of churn is involuntary due to payment issues. 

If your strategy relies on sending generic "payment failed" emails, you are leaving money on the table. Modern subscription businesses use actionable dunning strategies to recover revenue. 

Here are 14 actionable dunning best practices to help you improve subscription renewals and reduce churn. Let’s dive in.

1. Invisible recovery with Account Updater

The best dunning strategy is the one the subscriber never sees. Cards expire, get lost, or are reissued with new chips. 

• The fix: Ensure your payment gateway has Account Updater enabled. This service automatically communicates with Visa and Mastercard to update card details in the background. Thanks to Account Updater, you can recover failed payments without the subscriber ever knowing there was an issue in the first place. 

2. Use payment retry logic (Smart retries)

Don't stick to the same rules every day. If you retry a card at 9:00 AM every day, and the user gets paid on Friday, you will fail for times in a row.

• The fix: Automate retries for failed payments using smart retry logic. Retrying payments on different days or times to boost recovery rates – remember that users can have insufficient funds or temporary card blocks. This behind-the-scenes effort can recover revenue without requiring customer action.

Retries should only be done on soft declines. Hard declines should not be retried – contact the subscriber immediately. 

3. Pre-dunning (prevention strategy)

Why wait for a payment to fail in the first place? 

• The fix: send a specialized "card expiry" reminder 14 days before the renewal date. This is a great, proactive way to increase involuntary churn and keep your payment success rate in check. 

Make sure you don't make it sound too administrative. Reach out to the subscriber with a benefit-driven approach: "Your card is expiring soon. Update it now to ensure interruption-free access to your favorite content."

4. Omnichannel messaging

Email open rates are not always as high as we'd like them to be. Don’t rely solely on email – a big chunk of your subscribers might not open the email. 

• The fix: Incorporate other communication channels like SMS or in-app notifications to reach customers where they’re most active. A multi-channel approach ensures your message gets through, even if emails are missed. App notifications catch the user exactly when they are realizing value from your subscription service. 

5. The grace period strategy and reminders

Cutting access the second a payment fails is aggressive and creates "churn by friction". 

• The fix: Implement a grace period. Keep the service running for a period of time to give the subscriber a chance to update their payment details but don’t overwhelm your customers with too many reminders. Space out your dunning emails over a 15-day period, with 3-4 well-timed messages. This balance keeps your communication effective without annoying your subscribers. 

Note: While some brands space their dunning emails over a 28-day period, this approach isn't recommended for monthly subscriptions as it effectively gives users a full month of free access.

6. Segmentation by LTV

If a user signed up last month and their payment just failed, you're likely experiencing fraud. But a subscriber who has been regularly paying for three years is a VIP – and should be treated like one.

• The fix: Split your dunning workflows based on customer lifetime value (LTV). For low-LTV customers, implement stricter grace periods. For high-LTV customers, you can extend the benefit of the doubt and apply a longer grace period. You can also tailor your dunning campaigns to things like subscription tier or account history. Personalized campaigns drive better results.

7. Vary your messaging – progressive urgency 

Each email is a chance to connect differently. Avoid sending the same message repeatedly. Start with a friendly reminder, follow up with a more urgent tone, and adapt based on customer behavior. Fresh, empathetic messaging keeps engagement high. It's also important to pay attention to your subject lines. Use urgency without being pushy: “Action needed: update your payment info” or “Don’t lose access to [service name].” 

8. Make your CTA crystal clear

Your call-to-action should be simple and direct, for example, “Update Your Payment Info.” Avoid vague or cluttered CTAs that confuse customers. A clear path leads to quicker action.

9. Provide more payment methods

If your "Update payment method" page requires typing 16 digits, you are failing mobile users.

• The fix: Your dunning page must support various and local payment methods for a better user experience. 

10. Offer more than one option

Not every customer issue is about payment.

• The fix: Include links to FAQs, customer support, or live chat in your emails. Offering help beyond billing shows you care and builds loyalty.

11. Set clear deadlines

Be transparent about timelines. Let customers know exactly when their account will be suspended if no action is taken. A countdown creates urgency and eliminates confusion.

12. Reinforce your value

Remind customers why they subscribed in the first place. Highlight the benefits they’ll lose if their subscription lapses. This positive reinforcement can motivate action.

13. A/B test and optimize your strategy

If you A/B test your landing pages, why not test your dunning strategy? Dunning isn’t a “set it and forget it” process.

• The fix: Continuously test different subject lines, email cadences, and messaging styles to see what resonates best with your audience. Use A/B testing to refine your approach and maximize recovery rates.

14. Win back lost subscribers

Dunning doesn't end when the subscription is cancelled. Many users churn due to a temporary financial glitch or personal circumstances. Once they are solvent again, make it easy to return with a win-back campaign. 

• The fix: 30 days after cancellation, send a "Come back" campaign. You can also offer a special discount or promote your lower-tier plans. 

Dunning isn’t just about recovering payments; it’s about creating a seamless, customer-focused experience. By following these best practices, you’ll recover more revenue, reduce churn, and build lasting customer loyalty.

Maximize your payment recovery with Cleeng

Cleeng’s Subscriber Retention Management (SRM®) platform is designed to help subscription businesses recover more revenue and reduce involuntary churn. With advanced dunning settings, Cleeng achieves an average retry success rate of 35% – well above the industry average of 21%  – and some clients even reach up to 40%. Features like Smart Retries, preemptive account updates using Network Tokens and Account Updater services provide the tools and insights needed to optimize your payment recovery strategy. Cleeng’s top clients boast a recurring payment success rate of 96.8%, proving that a data-driven, customer-focused approach can make all the difference.

Ready to transform your dunning strategy? Cleeng has the expertise to help you succeed.

Frequently Asked Questions about Dunning

What is the difference between dunning and collections?

Dunning is an automated process to recover recurring subscription payments while maintaining access. Collections is a manual process for recovering bad debt after a subscription has been canceled.

How often should I retry a failed payment?

Do not retry daily. Best practice is to use "Smart Retries", for example, on Day 1, Day 3, Day 7, and Day 14, or aligned with specific paydays (Fridays/1st of the month). 

What is a good recovery rate for dunning?

Average recovery rates are around 15-20%. However, using Account Updater and optimization tools like Cleeng can push recovery rates to 35% or higher.