Dunning Email Templates

Failed payments are an unfortunate reality for most SaaS and subscription-based businesses, causing them to lose around 9% of their monthly recurring revenue on average. Luckily, most failed payments occur unintentionally, without the customer even realizing what happened until they receive a dunning email. Though it might be a rather frustrating experience for your team and your customers, you can efficiently use well-written dunning emails to prevent involuntary churn and recover lost revenue. Below are some key points to remember when composing and sending dunning emails to your customers, along with some ready-to-use effective dunning email templates based on real-life examples.

What are dunning emails?

Dunning emails are the type of transactional emails (usually a series of emails) sent by SaaS and subscription-based businesses to notify customers about payment issues such as failed subscription payments, expired credit cards, or overdue payments. These emails typically update users about the status of their accounts and provide the option to update their billing information and make a payment to continue using the product or service. Dunning emails are an effective way to reduce customer churn and increase retention.

Best practices for dunning emails

1. Send emails from a real person

Even if your dunning emails are entirely automated, having them sent from a real person makes them feel more human and trustworthy and helps your emails get noticed. Research revealed that using an individual’s name instead of a general email address or a company name can increase your open rate by up to 35%.

2. Enable replies

Ensure you send your dunning emails from an email address your customers can respond to if they face any issues or want to ask further questions. ‘Do not reply’ addresses might only contribute to more customer frustration because you haven’t made it easy for them to get back to you if they wish to do so.

3. Remind them what they stand to lose

Instead of simply informing customers that their payment didn’t go through and asking them to update their credit card detail information, you can add some sense of urgency. Remind them what exactly they will lose if they don’t take the required action (such as losing access to their account and historical data, service interruption, etc.).

4. Include a clear CTA and next steps

A clear call-to-action is one of the most critical parts of dunning emails. Add a direct link that will take customers to update their billing information without opening another window, logging in, or clicking around. Ensure to let them know how long they have before their account will be deactivated unless a payment goes through.

5. Offer an alternative

Based on your pricing model, you can offer customers an alternative to canceling their account, such as downgrading to a free plan until they update their billing information or offering a special discount to continue using your service. This alternative could be beneficial if the payment failed due to insufficient funds.

Examples of dunning email subject lines

• Action Required – Your [Product] payment has failed
• Act now to keep your [Product] subscription
• We couldn’t process your [Product] payment
• Your [Product] payment didn’t go through
• Your [Product] payment was declined
• Uh-oh! Your payment for [Product] failed
• Billing issue – update your billing details

Ten dunning email template examples

1. Pre-dunning email

2. Basic short dunning email

3. Basic extended dunning email

4. Casual dunning email

5. Personalized dunning email

6. The ‘Loss aversion’ dunning email

7. Dunning email series – email #1

8. Dunning email series – follow up email #2

9. Dunning email series – follow up email #3

10. Dunning email series – the ‘final warning’ email #4

Best practices for dunning emails

Dunning emails are most effective when they follow certain best practices to maximize engagement and conversion rates:

Keep it concise and empathetic

Your dunning email should be brief and to the point. Customers who are facing payment issues are likely in a hurry or frustrated, so respect their time. Use empathetic language that shows you understand their situation and that there are no hard feelings.

Confirm the issue immediately

Make sure to clearly communicate what the payment issue is. This gives customers clarity and prevents confusion about their account status.

Provide clear next steps

Include explicit instructions on how to resolve the payment issue. Whether it’s updating billing information, contacting support, or retrying payment, make the path forward obvious.

Offer multiple resolution options

Provide customers with various ways to resolve their payment issue, such as updating their card online, calling support, or using live chat. This flexibility increases the likelihood they’ll take action.

Personalize when possible

Use the customer’s name and reference their account history or specific features they use. Personalization makes the email feel less like a generic automated message and more like a genuine communication.

Avoid being pushy

Don’t try too hard to convince customers to stay. Aggressive sales tactics in a dunning email can damage your brand reputation and make customers feel worse about their situation.

Test and optimize

Monitor your dunning email metrics like open rates and click-through rates. Test different subject lines, messaging, and timing to see what resonates best with your audience.