Dunning strategies — what we recommend at $5K, $50K, and $500K ARR.
Dunning strategy depends on scale. At $5K ARR, the tactic is one email after a failure plus Stripe Smart Retries. At $50K ARR, the cadence becomes two emails plus Lou's contextual drafting. At $500K ARR, you're integrating with a churn-prevention vendor (Churnkey, Churn Buster) for in-product cancel flows on top of the recovery email layer. The sequence is additive, not replacement.
Dunning strategies for SaaS
Dunning means the cadence of communication a vendor uses to recover an unpaid invoice. The Revenue Post canon covers the wedge philosophically; this cluster page covers the tactical strategy at three ARR bands.
**At $5K ARR (under 50 customers).** Stripe Smart Retries plus a single founder-written recovery email is enough. The volume is low enough to handle by hand. The customer count is small enough that you can remember each customer's situation. Don't over-tool here — a porchops Free tier with Lou doing the email drafting saves you the writing time without adding cognitive load. Two emails per failure (one at 24h, one at 7 days) is overkill at this scale; one well-timed email after Stripe's retries finish is plenty.
**At $50K ARR (50–200 customers).** The volume crosses the threshold where you can't track every failure mentally. This is where the email layer needs to be operational, not heroic — Lou drafting cause-matched emails, founder approving with one click, audit log maintained automatically. Two emails per failure becomes worthwhile because the customer base is diverse enough that some failures are soft (recoverable) and some are hard (non-recoverable), and the second email targets the soft-decline cohort specifically. Auto-send under $500 with established customers becomes a reasonable default.
**At $500K ARR (500+ customers).** The dunning surface gets stratified. You're integrating with a churn-prevention vendor for in-product cancel flows (Churnkey is the strongest pick); you're using Stripe Smart Retries on the technical layer; you're running Lou and Cleo for the email layer (recovery + renewal touchpoints); and you're tracking recovery rates by decline-code bucket, customer segment, and tenure to optimize per cohort. The audit log starts paying real dividends here — you can A/B test recovery email copy, measure which cohorts respond to which tactics, and tighten thresholds quarterly.
Above $500K, the strategy starts requiring dedicated operations resourcing. A part-time billing operations role becomes worthwhile around $1M ARR. Until then, the operational layer (Lou + Cleo + the audit log) is what scales without adding headcount.
What doesn't change across scales: the email tone. Generic dunning emails feel robotic at $5K and at $500K alike. The recovery email that reads like the founder wrote it is the differentiator at every scale. Lou's value is consistency — the email reads like the founder no matter how many fail per month.
Tools to avoid: anything that promises 30%+ flat recovery rates without breakdowns by decline code (the numbers don't generalize); anything that sends more than two emails per failure (relationship-damaging); anything that auto-cancels subscriptions without explicit founder configuration (legally and relationally risky). The market has good players. Use them in concert, not as silver bullets.
Common questions.
Which dunning vendor should I pick?
Depends on your scale and existing stack. At $5K-$50K ARR, porchops alone is enough. At $50K-$500K, pair Lou with whichever vendor handles your cancel flows (Churnkey is the strongest). Above $500K, you'll likely have multiple vendors; that's fine — they're complementary if you scope them correctly.
What recovery rate should I expect?
35-55% across the failed-payment surface, with significant variation by decline-code bucket. Expired-card recoveries cluster around 70%; soft declines around 50%; hard declines around 15%. The audit log will tell you what your specific mix yields after a few months.
Two emails or three?
Two. Empirically, three emails per failure damages the relationship. The diminishing return on the third email is steep, and the perceived pressure crosses the line from helpful to nagging. Two emails covers the soft-decline recovery window without crossing it.