Smart Dunning AI for Collections

Failed payments are inevitable in any recurring billing business. What separates successful gyms from those that lose revenue is how they handle the follow-up. Pulse AI's smart dunning system optimizes every aspect of the collections process — when to reach out, how to reach out, and what to say.

How AI Optimizes Dunning Timing

Traditional dunning sends a reminder immediately after a payment fails, then follows a rigid schedule (e.g., retry day 3, reminder day 5, final notice day 10). Smart dunning takes a more intelligent approach.

Pulse AI analyzes each member's behavioral patterns to determine the optimal time to send dunning messages:

• Historical payment patterns — If a member's payments typically succeed on the second retry after a payday cycle, Pulse AI times the outreach accordingly.
• Communication responsiveness — If a member usually opens emails in the evening, the dunning message is scheduled for that window.
• Day of week — Pulse AI learns which days of the week produce the highest response rates for each member.
• Retry coordination — Dunning messages are timed to arrive shortly before a payment retry, prompting the member to update their card or ensure funds are available.

Configuring Dunning Timing

1. Go to Settings > Billing > Billing Schedule.
2. Toggle AI-Optimized Timing to on.
3. Set your dunning window — the maximum number of days after a failed payment before the account is flagged for manual review (e.g., 14 days or 30 days).
4. Set the maximum number of messages per dunning cycle (e.g., 4 messages over the dunning window).
5. Click Save. Pulse AI will handle the specific timing of each message within your parameters.

If you prefer fixed timing, leave AI-Optimized Timing off and configure a manual schedule instead.

Channel Selection (Email vs. SMS)

Not every member responds to the same communication channel. Pulse AI selects the best channel for each dunning message based on:

• Past engagement — If a member consistently opens emails but ignores SMS, Pulse AI will prefer email. If they reply to texts but rarely check email, SMS is chosen.
• Message urgency — As the dunning cycle progresses and urgency increases, Pulse AI may escalate from email to SMS for members who have not responded.
• Channel availability — If the member has no phone number on file, email is used. If their email has bounced, SMS is used.

Configuring Channel Preferences

1. Go to Settings > Billing > Billing Schedule.
2. Under the dunning channel options, choose your available channels:
   • Email only — All dunning via email.
   • SMS only — All dunning via text.
   • Email + SMS (AI selects) — Pulse AI chooses the best channel per message. This is the recommended setting.
3. Click Save.

AI-Drafted Dunning Messages

Generic "your payment failed" messages are easy to ignore. Pulse AI drafts personalized dunning messages that are more effective:

• Tone — Messages start friendly and gradually become more direct as the dunning cycle progresses. The tone is never threatening or aggressive.
• Personalization — The member's name, membership plan, and amount due are included. The AI may reference their recent activity (e.g., "We know you've been enjoying the HIIT classes on Tuesdays").
• Clear call to action — Every message includes a direct link to update payment information or make a one-time payment.
• Context-aware — If a member's card expired, the message specifically mentions updating card details. If the payment was declined for insufficient funds, the messaging is adjusted accordingly.

Reviewing and Approving Drafts

By default, AI-drafted dunning messages are sent automatically within the parameters you configure. If you prefer to review messages before they go out:

1. Go to Settings > Billing > Billing Schedule.
2. Toggle Require Staff Approval to on.
3. Pending dunning messages will appear under Billing > Collections for review before sending.

Success Metrics

Track how well your dunning process is performing:

1. Go to Reports and open the collections section.
2. Key metrics include:

• Recovery rate — Percentage of failed payments successfully recovered during the dunning cycle.
• Average recovery time — How many days it takes on average to recover a failed payment.
• Channel performance — Recovery rates broken down by email vs. SMS.
• Message performance — Open rates, click rates, and recovery rates for each dunning message in the sequence.
• Revenue recovered — Total dollar amount recovered through the dunning process over a given period.
• AI vs. manual comparison — If you have used both AI and manual dunning, this shows the performance difference.

Dunning Dashboard Card

The main dashboard includes a Collections card showing:

• Number of members currently in a dunning cycle.
• Total outstanding amount.
• Payments recovered this month.
• Recovery rate trend (improving or declining).

Best Practices

• Enable AI timing and channel selection. The AI consistently outperforms fixed schedules because it adapts to each member's behavior.
• Keep your dunning window at 14-30 days. Shorter windows may not give members enough time to resolve payment issues. Longer windows delay revenue recovery.
• Review the dunning queue weekly. Even with automation, spot-checking AI-drafted messages helps you catch edge cases.
• Follow up personally for high-value members. If a long-tenured member with a premium plan hits the dunning cycle, a personal phone call from management can make the difference.