For big brands that provide ongoing service to their customers, retention and renewal are critical to success. After all, retaining existing customers is less expensive than acquiring new ones — and improving retention just 5% can raise profits over 25% (HubSpot).

Of course, you probably already know that retention is important. That's why your brand likely invests in direct mail, calls, emails, and maybe even SMS to help avoid customer churn due to missed payments. But are you addressing the complete billing and retention lifecycle?

Understanding The Retention Lifecycle

When customers miss payments, it doesn't happen suddenly. There are many steps — both before and after the due date — that can determine whether customers pay on time or end up facing a cancellation of services. By understanding billing and retention as a lifecycle, brands can implement a more complete billing outreach strategy to boost retention.

Let’s zoom in and look at the lifecycle stages that are key to a retention outreach strategy. As we go over each stage, notice how they all have a unique role to play, with subtly different target audiences and messaging tactics.

Autopay

Autopay is unique in the lifecycle in that it comes early on, long before the customer’s first renewal date. For example, brands will often prompt customers to enroll in autopay during a welcome campaign. Nevertheless, autopay is a critical piece of the retention puzzle. If a customer successfully enrolls in autopay, they have a high likelihood of avoiding issues down the line.

Pre-Due Date Reminders

Reminders sent leading up to the due date will be familiar to many brands. These are especially useful for 6-month or yearly billing cycles, which can pose challenges for customers to remember their due date.

Post-Due Date Reminders

These reminders come shortly after the due date, and usually take a more serious tone. This stage is effective for customers who respond best to urgency.

Pending Cancellation

This stage comes when the customer will lose their service soon if they are unable to make a payment. It has the most urgent tone and is focused on prompting immediate action.

Offboarding

Offboarding refers to outreach after the customer relationship ends. Offboarding is used to learn why the customer is leaving, to get actionable customer feedback, and to find out what could be done to keep their business or win them back later (Forbes). Much like autopay, offboarding is relevant to retention, even though it might fall outside of the core billing stages we just discussed.

Win-Back

Similarly, this stage falls outside of strictly payment-related outreach and may not apply for every brand or every industry. Win-backs are a brand’s last chance to retain (or reacquire) a customer and is made easier by great offboarding that establishes a positive tone.

Compounding Benefits From A Complete Billing Outreach Strategy

Implementing outreach at each of these stages can yield a compounding positive effect on retention and customer lifetime value. While some stages are optional depending on your business, most brands can benefit from running separate campaigns for at least the core billing stages. These include pre-due date reminders, post-due date reminders, and pending cancellations.

Each of these campaigns can boost retention KPIs not only for its own stage but also for each following stage of the retention lifecycle. For example, engagement before the due date can reduce late payments, engagement after the due date can reduce cancellations, and so on.

Of course, more touchpoints usually mean increased response rates — that alone is nothing special. But we’ve found that the benefits of a complete billing outreach strategy go beyond a simple increase in the number of texts and calls. There are a couple reasons that this full lifecycle approach is more than the sum of its parts.

Improve Retention With Consistent Billing Outreach

First, a complete billing outreach strategy creates a relationship and a narrative that helps messages stand out and get noticed. A one-off message can easily be missed — or even mistaken for spam and intentionally ignored. On the other hand, a complete lifecycle approach establishes continuity and familiarity between the brand and the customer. This, in turn, increases the odds consumers will pay attention and engage. The effect can be enhanced further by using conversational outreach techniques, such as starting each conversation with a consistent agent name. (For example, “Hi, this is Ann from ABC Services.”)

Billing Outreach Isn’t One-Size-Fits-All

A complete billing outreach strategy is also effective because its diversified approach addresses the many reasons that customers miss payments. For example, let’s imagine a brand that has only invested in one stage of the retention lifecycle. This brand sends several messages about payment, but only in the lead-up to a customer’s renewal date. This will work great for the 22% of late-paying customers who mix up the due date (LendingTree). However, it won’t work as well for very busy customers who only respond when things are urgent (i.e., after the due date has already passed). This approach also leaves out the customers who incorrectly believe they have set up autopay, as they will assume that no action is needed.

These are, of course, simplified examples. In reality, each and every customer has unique circumstances and their own consumer psychology that might lead them to miss a payment. Brands need to adopt a broad approach to accommodate as many customers as possible.

Why Conversations as a Service Is Ideal For Billing

When contacting customers about bills, it’s important to choose a consumer-friendly outreach strategy that is suited to such a sensitive topic. Conversations as a Service is a strategy that uses two-way communication and real 1:1 conversation. This approach listens to consumers, gains valuable insights, builds brand trust, and adapts to each consumer’s needs.

All these factors make Conversations as a Service a natural solution for next-level billing outreach. Drips is the leader in AI-powered conversational outbound, and we’re excited to offer billing solutions for clients across major U.S. industries.

If you’re ready to see what AI-powered, conversational texting, calls, and voicemail can do for your billing outreach, you can download our Retain by Drips guide now.