117: Bounced Payments & Personal Follow-Up

Most subscription box companies set up failed payment automations, but relying solely on that automation is leaving money on the table and extra churn in your subscription box business every single month. In this episode, we're going to talk through the balance of automation plus personal connection. You need both. Come listen.

Welcome to the Launch Your Box podcast with weekly tips, tricks, and strategies to start, launch and grow your subscription box. Now here's your host, Sarah Williams.

I've had a large increase of bounced or failed payments in the last several months, and maybe you have too. I mean, money's tight. The cost of everything is skyrocketing and people just don't have the disposable income they once did, and it's affecting their payments. So what happens when you get bounced payments? That's what we're talking about today on the podcast. How do you handle bounced payments? And it's important for me to talk about it today because we've had such a large increase in bounced payments lately, and I thought it was something that we should talk about again, dive back through what happens in our workflow for a bounced payment and how we can recover the most of these payments, the most amount of these payments possible. So it keeps our churn low, it keeps our retention high, and it keeps us not scrambling to acquire the next customer all the time. All right. So let's talk about it today. The first thing that somebody would tell you is to automate it, automate it, make it easy, set it and forget it. It sounds great, right? But is it really? I'm a firm believer in having a failed payment automation set up for any recurring product like a subscription or a membership. So let's talk through that first and then I'm going to tell you why that's not the only answer here. OK, every system is different. You can set this an automation up directly in your subscription platform. That's the way I do mine or in your email CRM. The goal with your automation is to recover the payments quickly and efficiently, reducing the amount of time it would take to recover that payment manually and how much time you have to spend on personal outreach. Okay, so my, my subscription automation is set up like this. If you are a note-taker, grab the Notes app in your phone. If you're on your phone, if you've got your notebook handy, grab that. I'm going to walk you through my automation. And personal follow-up. I'm going to walk you through exactly how we handle all of our bounced payments in my subscription business. All right. So the first thing is I'll call it payment run number 1. This is the first time your payment starts to run. All of ours run on the same day. They run in batches. And so payment run number 1, bam, a payment has failed. Okay. So our automation is set up to send out email number 1. Right when that first failed payment hits. And it says something along the lines of, 'An error processing your payment for your blank subscription. If you need to update your card, please do so here, and we've attached the link.' Period. Short and sweet. 'Hey, it's the Framed team. We've had an error processing your payment. If you need to update it, here's the link. Your payment will run again in 12 hours.' In this email, it's important that you're not accusing them of anything. You're not blaming them like, oh, you have insufficient funds. Oh, I see your card is expired. Oh, I see this. We're not telling them why they had a bounced payment. We're just telling them, hey, there was an error in your payment. We put the blame on ourselves like, hey, this might be our error, but if you need to update your card, here's the link. Okay? And so we're just directing them to the place that they can take care of that themselves. And we're creating urgency with that 12-hour notification that it will run again. So this is a notice that, hey, go ahead and do this quickly because your payment's gonna run again in 12 hours. So we're creating urgency in that very first email automation that goes out. Hey, we had an error, take care of it with this link, and then we're gonna try again in 12 hours. So that way they can't put it on the back burner. Okay, so then in 12 hours, we're going to call it payment run number 2. So that comes through and we get a failed payment. In this email, it is very similar to email number 1, and I'm going to tell you why it's very similar— because they may not have seen email number 1 yet. So we're just going to give them the same information as email number 1. If their payment runs at 8 PM at night, their automation is going to come at 8 o'clock at night, and then their 12 hours later is going to be 8 AM. There's a good chance that they haven't seen that email in that 12-hour time span right there from 8 PM to 8 AM. Now, if their payment bounces at 8 AM and it's going to run at 8 PM, there's a good chance they'll see that throughout the day. So you just have to play this as if they didn't see that first one. I basically say the same thing in email number 2, and I tell them that their payment will retry in 24 hours. Okay, email number 1 was 12 hours. Email number 2, I'm giving them a little more time, 24 hours. Okay, now we're going to let 24 hours pass and our email number 3 comes out. So this would be payment run number 3. And along the way, payment run number 2, you're picking up several of the payments that have bounced in the first payment run. Okay, so now with payment run number 3, we're hoping that we get more of those payments picking back up. If it still continues to fail, we're gonna send email number 3 out via our automation. So email number 3 is gonna come out on the payment run number 3, which is actually about 36 hours after the initial payment run. Because remember that first one has 12 hours, and then the second one comes through, and now you have 24 hours before the third one. So 24 and 12 is 36. So their third email in 36 hours is coming. Okay, more than likely they've seen one of the first two. So this email is going to be different. Our messaging needs to change in email number 3. Email number 1 and 2 are plain text emails. In the third email, the third automated email, I'm going to add an image to this. Okay, so it says something along the lines of, hey subscriber, we are busy personalizing and packing all of our subscriptions and want to make sure you get yours on time. If you need to update your card, please do so here, and I'll leave the link. If you need help with that or have an issue, please hit reply and let us know how we can help. In this email, I'm adding a picture of us packing a box. It's a generic box, it's not that particular month's box. You can't even see the product going in it. So it's just a photo that can run on every month's automation, a very generic photo of us packing boxes. Okay, that triggers, oh yeah, that's my Monogram Box subscription. I love that box. I want to make sure that I get my link updated in this. And so the reply on this email is going to go to our customer service inbox, and we usually have a phone number on that email as well that they can call with our business hours linked in that email. Sometimes they just need to call and that's okay. And we provide that for them. Not everybody does, but that's one of the ways that we believe in personal connections and personal follow-up, giving them options. They can hit reply and email us, or they can pick up the phone and call us. And then on that email, we're going to let them know that we're going to run our payment in 48 hours. This gives them time to reach out to us and for us to reply again before the system tries their payment again. Okay, so now we have 48 hours in between our automations number 3 and 4. So in between number 3 and 4, we're going to start to work through this failed payment list with personal touchpoints. We just pull a list of all the current failed payments in our subscription processor and we get to work because all of our payments run on the same day, we are able to just pull that list and know that they've been through all the automations, um, at to this point. If your payments run on different days, you're going to need to sort this sheet a little bit to know what automations they've had and not had. We want to work this list between automation number 3 and automation number 4 in that 48-hour window. Okay, so the first thing that we do is we will send a personal email. Sometimes an automated email will go straight to spam. Sometimes it'll land in their inbox, but we know our personal email accounts have a higher deliverability. So we're going to send them a one-to-one personal email, not a mass bulk email campaign. It's going to be a one-to-one email and it's a copy and paste template. Okay, so just pull it up on your screen. You're going to copy and paste it. You're going to change who it's to and you're going to send these out one by one. Okay. Hey, it's Lauren from Framed. I want to make sure that you get your box on time this month. It looks like we just need it. We just need an updated payment. Here's the link, or you can call me at this number if I can help. It's simple, but it's a one-to-one email. That is more likely to end up in their inbox than our automation, automated bulk emails. Okay. Now, if there's no response to the personal email, the next day we send a text. Okay. So that's the next step. Same format as that email, but it's a personal one-to-one text. Hey, it's Lauren from Framed. We've sent a few emails, but I want to make sure you haven't missed them. It looks like we need it. We need to update your monogram box payment on file. Here's the link to do that, or call me and I can help. Again, it's a personal reach out. I am guilty of having a few too many inboxes and missing some things. If someone sends me a text where I can just do it right from my phone and I don't have to sift through my email box or I haven't seen the email, I'm more likely to do that. So day 1 and day 2, personal email and text. And this is in between automation number 3 and 4. Now, by this time, payment number 4 doesn't go through. We've got another failed payment. In email automation number 4 is actually day 5 of their failed payment. So when all the automations have run, we're now into day 5. And it's our last chance email. This automation is saying boxes are shipping, we want to make sure you get your monogram box this month. If you need to update your card, here is the link. If you need some help, please hit reply or call us at this number. Okay, so that is our last automated email. We do 4 automated emails and 3 personal touch points. So at this time If automation number 4 goes through and we don't have a response back, we do one more personal outreach. And this would either be a voice call or a text. And this call is urgent. This message is urgent. This is, this is the last time I will reach out to you about your monogram box payment. We would love to get you a box this month. Please let us know how we can help. And we have the ability to call us back or text us back from that last touchpoint. Based on this flow, these 4 automated emails and 3 personal touchpoints, we recoup 98% of our balance payments every single month with this plan. If you're relying solely on your automations You're losing money and you're having unnecessary churn in your subscription box business, period. If you are only using automations at this point, you're leaving money on the table. Your subscribers aren't just a number. We have spent a lot of time, effort, and energy getting them as subscribers. Why would you rely solely on automations to keep from losing them? Business is personal. I say it all the time. Don't leave out the connection piece when you're trying to retain your subscribers. We're all busy. We have such great intentions to go and take care of something as a consumer and totally forget. You're probably guilty of it just as much as I am. We have to keep serving it back in front of them in as many ways as possible. I used to be the one that did this every single month. In the business. I did it for a long time, maybe too long, but it really was the best use of my time. It was the best use of my time because if I think about how much money I spent on acquisition, how much time and money I spent on acquisition, like getting new subscribers versus a few hours a month retaining them, Why wouldn't you spend the few hours if you could retain 98% of these bounced payments in a few hours a month? Would you do it? You would do it. You would do it until you can hire someone else to do it for you. Now Lauren does it for me. She's my customer service manager and she handles all of our bounced payments and all of our, you know, changes in our subscriptions and in any of that. You would do it if you don't have a customer service person. This needs to be top of your to-do list. You can't afford not to do it is what I'm trying to say here. It is the best use of your time, especially when you think about how much time, effort, energy, and dollars you're putting into acquiring new subscribers when it took a fraction of that effort to retain them. Most failed payments— people do not want to cancel their subscription. They don't. And if you think that they do, you're wrong. It's because of time. It's because of ease. That's the only reason why they're not updating their payment. Get it in front of them. Make sure you have a plan of both automations and personal follow-up and go save your subscribers. If the idea of creating a subscription box is swirling around in your head, I encourage you to head over to launchyourboxwithsarah.com, get on our waitlist, and grab some of our free downloads to help you get started. That's launchyourboxwithsarah.com.