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Pre-Dunning in 2025: Build a Multi-Channel Workflow That Cuts Involuntary Churn by 15%
Introduction
Involuntary churn is the silent killer of subscription businesses. While you're busy optimizing onboarding flows and feature adoption, up to 70% of your churn stems from failed transactions—customers who never intended to leave but are forced out when a card is declined (Slicker). The numbers are staggering: involuntary churn can represent up to 30% of total customer churn for subscription businesses (Slicker).
But here's the opportunity: unlike voluntary churn, involuntary churn is entirely preventable with the right pre-dunning strategy. A well-orchestrated multi-channel workflow combining email, SMS, push notifications, and in-app alerts can reduce involuntary churn by 15% or more. The key is reaching customers before their payment fails, not after.
In 2025, successful subscription businesses are moving beyond reactive dunning to proactive prevention. This comprehensive guide will show you how to build a pre-dunning workflow that combines industry best practices with cutting-edge automation to keep your customers subscribed and your revenue flowing.
Understanding the Pre-Dunning Landscape in 2025
The Scale of the Problem
The involuntary churn crisis is worse than most businesses realize. Recent analysis shows that involuntary churn accounts for as much as 34% of the overall churn rate (Drips). In some industries, decline rates reach 30%—and each one is a potential lost subscriber (Slicker).
Perhaps most alarming is this statistic: a staggering 62% of users who hit a payment error never return to the site (Slicker). This means that once a payment fails, you've likely lost that customer forever unless you intervene proactively.
The Eight Personality Types of Churned Users
To build effective pre-dunning workflows, you need to understand who you're trying to save. The 8 Personality Types of the Churned User framework reveals the diverse reasons behind payment failures (Slicker):
The 'New Card, Who Dis?' User: Updated their payment method but forgot to update your service
The 'Card Left the Building with Bob' User: Company card holder left, taking payment access with them
The 'False Fraud Flag' User: Legitimate transaction flagged by overzealous fraud detection
The 'Banking Adventure' User: Temporary account issues or bank maintenance
The 'Time Zone Traveler' User: International transactions triggering security blocks
The 'Temporary Card Tango' User: Using temporary or virtual cards that expired
The 'Seasonal Subscriber' User: Intentionally pausing during off-seasons
The 'Actually Voluntarily Churned' User: Decided to cancel but never completed the process
Understanding these personality types is crucial for building better retention strategies (Slicker). Each type requires a different pre-dunning approach and messaging strategy.
The Rise of AI-Powered Prevention
The AI sector in 2025 has seen unprecedented acceleration, with compute scaling 4.4x yearly and LLM parameters doubling annually (SentiSight). This technological advancement is revolutionizing payment recovery, with machine-learning engines now able to predict the perfect moment, method, and gateway for each retry, lifting recovery rates 2-4x above native billing logic (Slicker).
Building Your Multi-Channel Pre-Dunning Workflow
Channel Strategy and Timing
The most effective pre-dunning workflows use multiple touchpoints across different channels. Based on industry benchmarks, the optimal cadence involves three-to-four messages over 28 days, starting 7-10 days before the renewal date.
Recommended Channel Sequence:
Day -7: Email notification with payment update link
Day -3: SMS reminder with direct action button
Day -1: Push notification (mobile app users)
Day 0: In-app alert during active session
Day +1: Final email with urgency messaging
Email: The Foundation Channel
Email remains the cornerstone of pre-dunning communication, offering the space needed for detailed explanations and clear calls-to-action.
Pre-Dunning Email Template 1: Initial Warning (Day -7)
Pre-Dunning Email Template 2: Urgent Reminder (Day +1)
SMS: The Urgency Channel
SMS delivers immediate impact with open rates exceeding 90%. Keep messages concise and action-oriented.
SMS Template Examples:
Push Notifications: The Contextual Channel
Push notifications work best when users are actively engaged with your product. Time these for peak usage hours.
Push Notification Examples:
In-App Alerts: The Conversion Channel
In-app messages have the highest conversion rates because users are already engaged with your product.
In-App Alert Strategy:
Use modal overlays for critical payment failures
Implement banner notifications for upcoming expirations
Provide one-click payment update flows
Show progress indicators during the update process
Advanced Segmentation and Personalization
Segmentation by Decline Codes
Not all payment failures are created equal. Segment your pre-dunning campaigns based on specific decline reasons:
Insufficient Funds (Decline Code: 51)
Messaging: "Temporary payment issue"
Timing: Retry in 3-5 days
Channel: Email + SMS
Tone: Understanding and helpful
Expired Card (Decline Code: 54)
Messaging: "Card expired - quick update needed"
Timing: Immediate action required
Channel: All channels
Tone: Urgent but supportive
Fraud Suspected (Decline Code: 59)
Messaging: "Security verification needed"
Timing: Immediate with manual review
Channel: Email + phone call
Tone: Security-focused and reassuring
Fraud-based declines are up 41% according to recent data, making this segmentation increasingly important (Slicker).
Customer Value Segmentation
Tailor your pre-dunning intensity based on customer lifetime value:
High-Value Customers (Top 20% by LTV)
Personal outreach from account managers
Phone calls in addition to automated messages
Extended grace periods
Priority customer support
Mid-Value Customers (Middle 60%)
Standard multi-channel workflow
Self-service payment update options
Email and SMS reminders
Low-Value Customers (Bottom 20%)
Automated email sequence only
Basic payment update flow
Standard retry logic
Geographic and Temporal Considerations
Customize timing and messaging based on customer location:
Time Zone Optimization: Send messages during business hours in the customer's local time zone
Cultural Adaptation: Adjust messaging tone and urgency levels for different markets
Payment Method Preferences: Prioritize local payment methods and currencies
Regulatory Compliance: Ensure GDPR, CCPA, and local privacy law compliance
Automation and Technology Stack
Essential Tools and Integrations
Building an effective pre-dunning workflow requires the right technology stack:
Payment Intelligence Platforms
Platforms like Slicker process each failing payment individually and convert past-due invoices into revenue (Slicker). These systems offer 5-minute setup with no code changes, plugging into Stripe, Chargebee, Recurly, Zuora, and Recharge (Slicker).
Customer Communication Platforms
Email: SendGrid, Mailgun, or Postmark for transactional emails
SMS: Twilio, Plivo, or MessageBird for global SMS delivery
Push: OneSignal, Pusher, or Firebase for mobile notifications
In-App: Intercom, Pendo, or custom modal systems
Data and Analytics Tools
Customer data platforms (CDPs) for unified customer profiles
Analytics tools for tracking campaign performance
A/B testing platforms for optimizing messaging
Business intelligence tools for reporting and insights
At-Risk Customer Alerts
Modern payment recovery platforms offer At-Risk Customer Alerts that automatically trigger pre-dunning workflows based on predictive signals. These systems analyze patterns like:
Card expiration dates approaching
Historical payment failure patterns
Customer engagement levels
Account status changes
Geographic risk factors
Slicker's At-Risk Customer Alerts provide automated triggers that identify customers likely to experience payment failures before they occur, enabling proactive intervention (Slicker).
Implementation Workflow
Step 1: Data Integration
Step 2: Trigger Configuration
Step 3: Message Personalization
Step 4: Monitoring and Optimization
Metrics and Performance Tracking
Key Performance Indicators (KPIs)
Track these essential metrics to measure your pre-dunning workflow effectiveness:
Primary Metrics:
Pre-Dunning Success Rate: Percentage of at-risk customers who update payment methods before failure
Involuntary Churn Reduction: Month-over-month decrease in involuntary churn rate
Revenue Recovery: Dollar amount of MRR saved through pre-dunning efforts
Customer Lifetime Value Impact: LTV improvement from reduced involuntary churn
Channel-Specific Metrics:
Email Open Rates: Target 25-35% for transactional emails
SMS Response Rates: Target 15-25% for payment-related SMS
Push Notification CTR: Target 5-10% for payment alerts
In-App Conversion: Target 20-40% for modal payment updates
Operational Metrics:
Time to Payment Update: Average time from alert to successful payment method update
Support Ticket Volume: Reduction in payment-related support requests
False Positive Rate: Percentage of at-risk alerts that don't result in payment failures
Customer Satisfaction: CSAT scores for pre-dunning communications
Benchmarking and Industry Standards
Based on analysis of over $3 billion in subscription revenue and 15 million subscriptions, industry benchmarks show that effective pre-dunning workflows can achieve (Churnkey):
15-25% reduction in involuntary churn
3-5% improvement in overall retention rates
10-20% increase in customer lifetime value
40-60% reduction in payment-related support tickets
Advanced Analytics and Reporting
Cohort Analysis
Track pre-dunning effectiveness across different customer cohorts:
New vs. existing customers
High-value vs. low-value segments
Different acquisition channels
Geographic regions
Predictive Modeling
Use machine learning to improve at-risk customer identification:
Payment failure probability scoring
Optimal contact timing prediction
Channel preference modeling
Churn risk assessment
ROI Calculation
Advanced Strategies and Best Practices
Dynamic Retry Logic
Dynamic retries represent a significant leap forward because the system evaluates nuances in real time, ensuring higher accuracy and success (Slicker). This approach considers:
Decline Code Analysis: Different retry strategies for different failure types
Customer Payment History: Adapting retry timing based on past success patterns
External Factors: Bank holidays, weekends, and regional payment processing schedules
Gateway Performance: Routing retries through the most successful payment processors
Card Updater Services
Automatic card updater services can recover up to 20% more invoices before a retry is even needed (Slicker). These services automatically update expired or replaced card information, preventing many payment failures before they occur.
Implementation Checklist:
Enable card updater services with your payment processor
Set up automated notifications when cards are updated
Configure fallback workflows for cards that can't be updated
Monitor updater success rates and optimize accordingly
Multi-Gateway Routing
Smart payment routing across multiple gateways can significantly improve success rates. Consider factors like:
Geographic Optimization: Route payments through locally preferred processors
Decline Code Routing: Send specific failure types to gateways with higher success rates
Cost Optimization: Balance success rates with processing fees
Redundancy: Maintain backup gateways for primary processor outages
Personalization at Scale
Behavioral Triggers
Send pre-dunning alerts when customers are most active
Customize messaging based on feature usage patterns
Adjust urgency levels based on engagement scores
Personalize channel preferences based on response history
Content Personalization
Reference specific features the customer uses most
Include usage statistics and value metrics
Customize imagery and branding for different segments
Localize messaging for international customers
Implementation Timeline and Roadmap
Phase 1: Foundation (Weeks 1-2)
Week 1: Assessment and Planning
Audit current payment failure rates and patterns
Identify at-risk customer segments
Evaluate existing technology stack capabilities
Define success metrics and KPIs
Week 2: Tool Selection and Setup
Choose payment intelligence platform
Set up customer communication tools
Configure basic webhook integrations
Create initial message templates
Phase 2: Basic Implementation (Weeks 3-4)
Week 3: Workflow Configuration
Set up automated trigger conditions
Configure basic email and SMS workflows
Implement customer segmentation rules
Test end-to-end workflow functionality
Week 4: Launch and Monitor
Launch basic pre-dunning workflow
Monitor initial performance metrics
Gather customer feedback
Make initial optimizations
Phase 3: Advanced Features (Weeks 5-8)
Week 5-6: Multi-Channel Expansion
Add push notification capabilities
Implement in-app messaging
Set up advanced segmentation
Configure A/B testing framework
Week 7-8: AI and Optimization
Implement predictive at-risk scoring
Add dynamic retry logic
Set up advanced analytics
Optimize based on performance data
Phase 4: Scale and Optimize (Ongoing)
Monthly Reviews
Analyze performance metrics
Optimize message content and timing
Expand successful strategies
Test new channels and approaches
Quarterly Assessments
Review overall program ROI
Benchmark against industry standards
Plan feature enhancements
Update technology stack as needed
Common Pitfalls and How to Avoid Them
Over-Communication
The Problem: Bombarding customers with too many messages can lead to unsubscribes and negative brand perception.
The Solution:
Implement frequency caps across all channels
Use progressive messaging (start gentle, increase urgency)
Provide easy opt-out options for non-critical communications
Monitor customer feedback and adjust accordingly
Poor Message Timing
The Problem: Sending alerts at inconvenient times reduces effectiveness and annoys customers.
The Solution:
Respect customer time zones and business hours
Analyze engagement patterns to find optimal send times
Avoid weekends and holidays for non-urgent messages
Allow customers to set communication preferences
Generic Messaging
The Problem: One-size-fits-all messages fail to resonate with different customer segments.
The Solution:
Segment customers based on value, behavior, and preferences
Personalize messages with relevant customer data
Test different messaging approaches for different segments
Use dynamic content to scale personalization
Inadequate Testing
The Problem: Launching workflows without proper testing can lead to poor customer experiences and technical failures.
The Solution:
Implement comprehensive testing protocols
Use staging environments that mirror production
Test all customer journey paths and edge cases
Monitor error rates and customer feedback closely
Future Trends and Considerations
AI-Powered Personalization
As AI capabilities continue to advance, expect more sophisticated personalization in pre-dunning workflows. Machine learning models will better predict optimal messaging, timing, and channel selection for individual customers.
Voice and Conversational Interfaces
Voice assistants and chatbots will play larger roles in payment recovery, offering customers convenient ways to update payment information through natural language interactions.
Blockchain and Cryptocurrency Integration
As alternative payment methods gain adoption, pre-dunning workflows will need to accommodate cryptocurrency payments, stablecoins, and blockchain-based payment systems.
Enhanced Privacy and Compliance
Stricter privacy regulations will require more sophisticated consent management and data handling practices in pre-dunning communications.
Conclusion
Involuntary churn doesn't have to be an inevitable cost of doing business. With a well-designed multi-channel pre-dunning workflow, you can cut involuntary churn by 15% or more while improving customer experience and reducing support burden.
The key is to start with a solid foundation: understand your at-risk customers, implement reliable automation, and continuously optimize based on performance data. Remember that platforms like Slicker only charge you for successfully recovered payments (Slicker), making it easier to justify the investment in advanced payment recovery technology.
Begin with basic email and SMS workflows, then gradually add more sophisticated features like AI-powered timing, multi-gateway routing, and predictive at-risk scoring. The subscription economy rewards businesses that can retain customers effectively, and pre-dunning is one of the most impactful retention strategies you can implement.
Start building your pre-dunning workflow today, and watch your involuntary churn rates—and customer satisfaction scores—improve dramatically. Your customers will thank you for keeping them subscribed, and your revenue will reflect the impact of proactive payment failure prevention.
Frequently Asked Questions
What is pre-dunning and how does it reduce involuntary churn?
Pre-dunning is a proactive approach that alerts customers before their payment fails, rather than after. By implementing multi-channel notifications (email, SMS, push, in-app) before the payment attempt, businesses can reduce involuntary churn by up to 15%. This strategy addresses the fact that up to 70% of subscription churn stems from failed transactions, not customer dissatisfaction.
Which channels are most effective for pre-dunning notifications?
The most effective pre-dunning strategy uses a multi-channel approach combining email, SMS, push notifications, and in-app alerts. SMS has proven particularly effective for urgent payment updates, while email works well for detailed instructions. Push notifications provide immediate visibility, and in-app alerts catch users during active sessions when they're most likely to take action.
How much involuntary churn can pre-dunning actually prevent?
According to industry data, involuntary churn accounts for as much as 34% of overall churn rates. A well-implemented pre-dunning workflow can reduce this by 15% or more. Given that Churnkey recovered $250 million in revenue in 2024 from failed payments, the financial impact of effective pre-dunning strategies is substantial for subscription businesses.
What are the key components of an effective pre-dunning workflow?
An effective pre-dunning workflow includes: automated triggers 3-7 days before payment attempts, personalized messaging across multiple channels, clear action steps for customers, fallback payment methods, and integration with AI-powered payment recovery systems. The workflow should also include timing optimization and A/B testing to maximize recovery rates.
How does AI-powered payment recovery enhance pre-dunning efforts?
AI-powered payment recovery systems can analyze customer behavior patterns, payment history, and transaction data to optimize pre-dunning timing and messaging. These systems can predict which customers are most likely to experience payment failures and customize the pre-dunning approach accordingly. As highlighted in Slicker's research, AI implementation can significantly improve payment recovery rates when combined with proactive pre-dunning strategies.
What metrics should I track to measure pre-dunning success?
Key metrics include: involuntary churn reduction percentage, payment recovery rate, customer response rate to pre-dunning messages, time-to-resolution for payment issues, and overall revenue recovered. You should also track channel-specific performance (email vs SMS vs push) and customer satisfaction scores to ensure the pre-dunning process doesn't negatively impact user experience.
Sources
https://www.drips.com/resources/how-proactive-sms-fights-involuntary-churn
https://www.sentisight.ai/ai-benchmarks-performance-soars-in-2025/
https://www.slickerhq.com/blog/how-to-implement-ai-powered-payment-recovery-to-mi-00819b74
https://www.slickerhq.com/blog/the-8-personality-types-of-the-churned-user
https://www.slickerhq.com/blog/what-is-involuntary-churn-and-why-it-matters
WRITTEN BY
Slicker
Slicker
