How Dunning can help your D2C eCommerce business with customer retention and revenue recovery.

August 17, 2022
Clara Holz

Running a subscription business is a bit like collecting water with a massive bathtub. There's a lot of money to be made and customers to retain but there's always going to be water leakage at some point. The rate of that water outflow is called customer churn, and it can run down any subscription business if it is not addressed.

The good news however is that if Dunning is done right, it can preserve your customer base, and prevent revenue loss from both voluntary and involuntary churn.

With the advent of SaaS, dunning processes have turned into something vastly different. While people in the pre-SaaS age defined dunning as the process of communicating with customers to ensure the collection of accounts receivable, it is so much more than that now. It has evolved to be described as the process of handling failed payments and declined credit cards to recover lost revenue..

Customer churn is inevitable for all businesses and issues like lack of payment options, card expirations, low engagement, and gateway problems, are a leading cause.

There is no doubt that retention of customers is more cost-effective for businesses than acquiring new customers, considering reports that suggest that it is five times more expensive than the retention. And according to Gartner, 75% of D2C brands will offer subscription services by 2023, but only 20% will succeed in increasing customer retention.

Agreeably, D2C businesses have been able to increase gross profit by eliminating the need for middlemen/retailers. Unfortunately, the issue of customer retention still remains a leading cause of revenue loss for D2C eCommerce businesses, with involuntary churn contributing significantly to the revenue loss rate.

The good news is that you can recover lost revenue and prevent future losses arising from churn. Here is how to achieve that:

Avoid involuntary churn and recover revenue with Dunning management.

While voluntary churn stirs you in the face, calls for attention, and is often due to things within your control. involuntary churn on the other hand is often beyond your control. It could happen for several reasons, the most common reasons in recent times are expired or blocked cards, outdated billing information, or insufficient funds. And with online shoppers opting for more payment option, one of the biggest reasons for involuntary churn tends to be card declines.

With Chargezen’s, you can say goodbye to failed payments and other causes of involuntary churn. Its dunning management system uses a churn bursting algorithm to fight involuntary churn in three ways:

1. In-app Pre-dunning Notification

If your subscriber's card is about to expire, Chargezen allows you to set up a sequence of reminders to inform users to update their payment information.

2. Lock Notification

in the event of payment failure, locking subscribers out of the service may leave a bad taste in their mouths, especially if the loss was due to any of the reasons we listed above. Chargezen allows you to inform your customer of a failed payment via app notifications, emails, and other channels. Furthermore, you can provide a grace period to sustain your relationship with the customer. If your users find your service essential, you've just proven yourself to have their best interests at heart.

3. Post Dunning

If despite your best efforts, you still lose a subscription to dunning, you’ll want to do something about it. Chargezen has a track record of recovering 8 out of every 10 involuntary churns through its post-dunning management options, allowing you to reengage lost subscribers.

Improve customer retention by creating alternatives to cancellation.

Losing customers is unavoidable and nobody enjoys loosing a customer and that is why adopting the appropriate actions that can help your organization by reduce churn is undeniably important.

According to research by Brightback Retention Products, 14.2 million American consumers were inclined to cancel a subscription; 51.7% claimed they'd be open to pausing and continuing their subscriptions if given the option. This is why providing subscribers alternatives to canceling such as pausing and continuing subscription at a later time is considered an effective churn reduction approach. The good news is that it also costs less to win back such customers compared to the ones that canceled altogether.

Chargezen helps you provide your customers with the option of pausing and reactivating their subscriptions rather than canceling their subscriptions, and that's how Chargezen's merchants reduce cancellations as against their competitors who do not provide such alternatives.

Investing in technology that grows with your business.

Many merchants' focus is usually to get a subscription solution that makes managing subscriptions easy, but what's even more important is adopting a solution that supports your business as you grow. One that makes it easy to launch subscriptions and provides additional features that make it equally easy to scale subscriptions.

This is why you need to Chargezen for your business. This is why I recommend subscription solutions like Chargezen that support businesses with the technology and automation necessary for growth, and constantly fine-tuning functionality based on your growing needs.

Smart routing: stop revenue leakage and promote Global expansion.

Localization is essential for the languages, currencies, payment methods, and payment gateways you provide. Due to the requirement to link a gateway account to every payment method you add, the process may grow complicated.

Smart routing directs payments to the bank responsible for conducting payment processing.

Another way to reduce revenue loss is through the smart routing technique.

This technique will help you manage the complications that come with adding a new payment method and syncing it with a payment gateway. The smart routing intelligence will help you pick the fastest and most suitable provider, this is done based on some parameters like geolocation, currency, card type, etc.

Smart routing will manage your multicurrency needs smoothly, this will give your business capacity for global reach and dominance.

Set up your eCommerce business for consistent growth.

An underrated but essential means of building and maintaining growth for your business long term is by building a relationship with your customers. Getting feedback from your customers,  and improving your services for a better customer experience while shopping with you is necessary for your business to grow.

To maintain your business and put it on the path to rapid and steady growth, you'll also need solutions that can give you flexibility and extra assistance so you can concentrate on customer retention, churn mitigation, and revenue recovery.


Certainly, experiencing a rise in growth rate and client retention is more profitable than experiencing an increase in churn rate and revenue loss.

That’s why you need Chargezen’s dunning management tool. It is designed to tackle both voluntary and involuntary churn, with an intelligent churn-bursting algorithm to help you reduce active and passive revenue loss.

Interested? Book a demo or email to get started.

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