When I hear the word dunning, the first thing that comes to mind is a nasty form letter from a collections department saying that if you don’t pay your bill now, something awful will happen.
Back in the day, I worked on software that produced those letters, and worked closely with the collectors who spent their days on the phone chasing past due debt. But if that’s your view of dunning today, you should expand your horizons.
In a modern monetization environment, dunning isn’t just about collecting on debt. In prepaid and subscription models, it’s about making sure that you have a form of payment on file that will work when it’s time for auto-renewal. It’s about managing communications around events, like credit card expirations, to create positive customer experiences and drive equally positive responses. It’s also about managing service availability for past due accounts that closes the door on revenue leakage.
As an example, I recently received an email from a company, letting me know that my credit card on file would soon be expiring. Given my interests in all things monetization related, I was curious as to how this would play out if I didn’t respond immediately.
Over the next few weeks, I received about a half dozen messages. On the day my card expired, I received a complementary 15-day service extension. At the end of the 15 days, I received a polite notification that my service would be temporarily disabled, and offering an incentive to come back, which I did. Not so long ago, my account would have quietly expired without anyone noticing and my service would have been discontinued, maybe days or weeks after the fact. Things have changed.
One of the things that has happened in our digital world is that the silos that used to create boundaries between accounting and marketing and IT teams and functions have gradually broken down (in some cases not so gradually). In this case, dunning has moved from being just a debt collection process to being yet another opportunity to make personal contact, strengthen customer relationships, offer incentive-based promotions, and even upsell and cross-sell. With the right technology and strategies in place, dunning can become another revenue opportunity.
In the digital economy, whether you’re billing prepaid subscriptions or postpaid usage, your goal is to extend the life of customer relationships and increase customer lifetime value. Every contact with a customer, every touch point, is an opportunity to build or break down customer loyalty. Dunning becomes another of these ‘revenue moments’, and an integral part of your monetization strategy.
To make the most from dunning, your monetization platform should empower the process in an automated fashion, with user configurable capabilities in three specific areas:
Your monetization platform should enable and automate everything from traditional debt chasing on postpaid accounts to managing payment methods on prepaid subscriptions. And if you’re managing collections from an existing ERP platform, your monetization system should integrate and synchronize with that platform to manage service delivery based on payment status.
Dunning has come a long way since the days of paper form letters and phone calls – from simple debt collection processes to modern technologies that enhance customer relationships and prevent revenue leakage. As you look at modernizing monetization processes, don’t overlook this part of the process.
Are we done with dunning? Turns out, we’ve only just begun.