The foundation of SaaS businesses are recurring payments, correct? As a person running this kind of business, you would like it very much if all the payments kept recurring seamlessly.
Well, that’s understandable, you have done so much. Your clients have a myriad of payment options, multiple currency acceptance, they have it as easy as a piece of cake. So why isn’t your well-deserved cash rolling in seamlessly?
As usual, in reality, SaaS businesses, as any other businesses, tend to get much more sticky. The real question is: How do you ensure timely payments? And what do you do with a customer, whose money doesn’t come through?
The key to a client’s heart and very often to his or her pocket is respect and the sense of being special. And what’s the best way to express how a customer is important to us?
Ladies and gentlemen, it is an E-MAIL.
The old school e-mail communication is an ingenious way to reach a customer directly, to be personal and to know him or her better. It may sound like a cliché, but good e-mail practices and well-designed strategy aren’t that obvious. There are numerous companies that failed and only a few that nailed it.
Out of a variety of e-mails sent to customers, there are those more and those less frequently opened or read. In fact, it’s a long haul to create a message that won’t be ignored. Unless it’s a transactional e-mail.
In SaaS businesses, transactions are based on money, similarly, transactional e-mails also will be about the payments. The rule of paying for something and receiving a confirmation, a receipt, is so deeply rooted in us, that we actually await for such a message. That’s the secret to high open rates of transactional e-mails.
What transactional e-mails should be sent by a respected SaaS business?
The payment confirmation e-mail
Actually, it’s the confirmation that you have just taken the money directly from a customer’s credit card. It’s not only nice but also shows your respect, if you notify customers about the withdrawn money, so a smaller balance on the account doesn’t raise their eyebrows.
It can be as simple as: amount + date + description + contact details.
The invoice e-mail
It’s a message that informs your customer that an invoice has been drawn up and contains a link to it. Even better, if you just attach an invoice to your e-mail, so the customer doesn’t have to leave his inbox and dig it up somewhere on a website. Such an e-mail can be sent separately or as an integral part of the payment confirmation e-mail.
What is more, this type of e-mail is the kind of user experience your customers expect, so why not use the opportunity to subtly ask for feedback? However, don’t overdo it. Keep it consistent and short, remember to personalize it by putting your logo and color pattern there and thank the customer. That’s how you build an empathetic connection. Have a look how ZipBooks does it for its clients.
The upcoming charge e-mail
It is tactful to inform your customer before the payment is made, that you are going to charge his or her credit card. Especially after the first month (or other settling period you chose), at the beginning of your cooperation, before the customer learns the ropes of your services.
It makes the customer trust you and your brand and, since not everybody likes surprises, saves him this dubious pleasure.
The dunning e-mail
The term “dunning” describes the communication with clients whose transactions have failed and their credit cards have been cancelled. Usually, those aren’t bad customers, and the reason of card decline was simply the expiration.
Sometimes there is no clear reason why a card was declined and when you try again later, everything is fine. That is why you should give such customers the benefit of the doubt. Hold your horses on actions like freezing their accounts, until your customers get enough chances to explain themselves and rectify the payment error. The majority of SaaS benefit from period of 21 days, given to the customer so as he or she can get payments to go seamlessly again.
Remember, there is a huge gulf between being too lenient and too harsh.
The dunning e-mail should specify why a given transaction has failed – you want to save your customer from panic attack. A direct link to billing information update is also a plus, since it makes the process smooth, without painstaking searching the web for the correct website, blundering along and logging in where it is possible.
The essential thing is to be clear, however not too demanding, and to state what happens in case the payment fails again. To add more power to your message, remind a customer, what is your app doing for him or her, if there are any new functionalities, don’t hesitate to drop them between the lines. The customer wouldn’t like to miss out upcoming features.
Last but not least, one e-mail is not enough. If your customer’s inbox is overcrowded, a dunning e-mail will be buried among dozens of other messages. Why don’t you send out more, three messages within a week is a golden mean.
The end of trial period e-mail
If you run a software business, chances are, your app comes with a trial period. And trials end, that’s how they are. Your job is to make the transition from trial to paid period as seamless as possible, especially for all those, who have fallen in love with your services.
A successful way to do that is to notify your customers not once, but a few times, so they understand perfectly clear, that from now on, their credit card will be charged. Such notice should include a link, so it’s really easy for them get along.
An additional incentive to come on board with the paid services is to convince your customer that all his or her data will remain untouched and that everything will be the same, even better.
A clever idea is to mention all the amazing paid features non-intrusively, so the customer knows, what he is going to miss out on. Have a glance at how Mention did it:
The resubscribe e-mail
Sometimes, despite all your efforts, clients leave. They don’t feel like paying you anymore, or they just resigned after a trial period. It just happens.
But instead of moving on to the new ones, remind yourself of one thing: acquiring a new customer costs more than winning back an already acquired customer. So give them some time to take a deep breath, and once they do, send them a friendly reminder, that your software is still there, ready to assist them with even better tools. Invite them back as an old friend, tell them you’ve missed them.
Ensure, that although their account has been closed, you can re-open it and everything can be as it used to be, along with fresh, cutting-edge features. Dropbox nailed it!
In a nutshell
Having your SaaS business built on recurring revenue demands an additional effort made towards your customers and their credit card payments.
We know, you have been writing your software for months, added all functionalities so it works for your customers smoothly, but it still isn’t enough. You need to appreciate the power of direct communication with customers – e-mails. Such communication doesn’t only involve often ignored hello messages, it actually proves itself in the case of transactional communication related to payments.
Informing your customer about the intention of charging his or her card, sending an invoice, notifying about payment problems – it all expresses your respect. Yes, you are the boss, but you also realize that your business is based on people, who purchase your services. If you treat them well, invite them back, even if they get cold feet sometimes, they will pay you back with trust, loyalty and, of course, money.