When Good Customers Go Bad: Building an Overdue Enforcement Policy

You hate to see it, but its a reality of the subscription business model. The monthly charge is declined.  The charge to the payment method on file doesn’t work and invoices are not paid on time.  As a business that wants to ensure customers are entitled to services they actually pay for, you need to develop a comprehensive Enforcement Policy.

The objectives are simple – increase revenue by pushing customers to resolve billing issues and pay off their invoices.  Otherwise, people will freeload and find ways to abuse the system.  Sound familiar?

Overdue enforcement is a process triggered when customers aren’t paying money. It represents an escalating sequence of events to get the the client to pay up. Our experience tells us that enforcement messaging should be baked into the product with several options for the customer to remedy the situation on their own. Here is a summary of the basic process as implemented at Ning:

  • If a network has an unpaid invoice over 10 days old, the network will be placed into “Warning“, meaning the Network Creator (NC) sees a message when they login to their network.
  • If a network has an unpaid invoice over 30 days old, the network will be placed into “Blocked“, meaning a lightbox will appear to the NC when the network is viewed.
  • If a network has an unpaid invoice over 45 days old, the network will be placed into “At Risk”, meaning the NC sees a non-dismissable lightbox and the member sees a dismissable light box on the network.
  • If a network has an unpaid invoice over 60 days old, the network will be placed into “Disabled“, meaning a non-dismissable light box appears informing the NC that the network is dead. NC has to pay to reactivate.
  • If a network has an unpaid invoice over 90 days old, the network will be placed into “Removed“, meaning the network is not be viewable by anyone, but the content is still stored on our systems.
  • If a network has an unpaid invoice over 150 days old, the network will be placed into “Purged“, meaning the content of the network will be removed from our systems.


Reviewing this, you may be wondering — “Why give a customer so much time if they’re not paying you?”  Good point. It depends on your industry and the service you’re offering.  Is your service something that is consumed seasonally?  Does your audience go beyond the subscriber?

In the case of Ning, we offer a platform to build out a custom, community based site. Our sites have admins and members whose interests need to be somewhat protected even if the creator of the site isn’t paying us. We learned over time that NC’s will come back and pay months later based on pressure from their consumers or other factors.  Thus the reason our initial implementation of the  timeline is rather long. You may want to tighten this up to 30 or 60 days max!


Whatever timing you decide upon, its important to document and communicate it. We communicated ours on the Billing & Refund Policy page (look for Overdue Payment heading), and pointed to it from within the product messaging with references to ‘Learn More’.


In order to implement the above, several systems needed to communicate with each other.  Our Billing system needed new states such as Good, Warning, Blocked, etc… A new endpoint was created to fetch the overdue stats of an application, then pass that to the social network application that runs our product. A series of light boxes and messaging was built to communicate what state a customer was in and what the effects would be of not paying your bill.

Measure, then Brace Yourself!

On the backend, you’ll need a basic Dashboard allowing you to view the number of customers relevant to overdue enforcement classified into specific categories that make sense for your business (base plan, premium plan, VIP plan, etc..).  You can then see the transitions into and out of the different overdue states at any point in time as well as measure the monetary impact of uncollected revenue.

Once the above is in place, be prepared to learn a lot about your business!  

In our case, we knew going into developing the policy that we were late to the game.  As such, we inherited a lot of abusers that were beyond 90 days past due upon launch of the timeline.  We dealt with most of these separately.  However, we soon discovered how many more overdue accounts moved through our timeline — that too with in dramatic fashion and in high volume!  It prompted us to step back and really evaluate our financials. It also allowed us to experiment with targeted messaging to customers in the various states – perhaps a topic for a future post!  Let me know if it is of interest …

Your input & Experiences?

Was this helpful?  Similar to how you implemented an enforcement policy for your business or different? Did you have an similar A-HA’s or surprises once your policy was in place?  Please share as we’d love to hear thoughts on best practices as well as your learnings!