Why Your Dunning Strategy Is Sending Customers to the Wrong Door
Subscription Prescription | Weekly Doses to Boost Ecommerce RevenueShow Notes
Most subscription brands are losing revenue to failed payments - not because customers don't want to pay, but because they're being sent to the wrong place to fix it. In this episode, I break down how payment processing actually works, what your processor health score means, and how to build a dunning strategy that actually recovers payments.
What we cover: How tokenization and payment processing work in subscription commerce Why your processor health score matters (and what hurts it) The math on why a 1% improvement in processing success is massive at scale In-app vs. third-party tools for payment recovery (Fly Code, Redux, Butter Payments) Why segmenting by payment method — credit card, Shop Pay, PayPal — is the key to better dunning How to stop sending PayPal subscribers to the wrong update link Subscribe to our newsletter for weekly doses just like this one: https://newsletter.thesubscriptiondoc.com
More from Subscription Prescription | Weekly Doses to Boost Ecommerce Revenue
Everyone chasing a 3:1 LTV to CAC ratio is chasing a number that came out of the pandemic ecom boom, and most brands could not survive it if LTV is measured in revenue dollars over 12 months. Until you define the margin and the time window, that ratio tells you almost nothing about the health of your business.
I hate aggressive discounting when you are trying to get someone in the door. But when a subscriber clicks cancel, increasing the discount is usually the right call, and the math is simple: most of those people are gone next month anyway, so one more profitable order is a win.
Most brands leave the post-purchase page empty, or they fill it with random add-ons nobody asked for. Meanwhile, merchants offering a monthly-to-quarterly subscription upgrade on that same screen are converting 20 to 30% of buyers in a single click.
Your subscribers are your most profitable customers. Run a 50% off sitewide sale for Black Friday and a lot of them will cancel just to grab it. That is the BFCM trap I see every year, and the fix is not to skip the sale. It is to layer your offers so subscribing stays the best deal on the site.
If you have to launch a hundred new ad creatives every week just to keep spend flowing, the problem is not your ads. It is your positioning.