Comments on: How Do You Handle Subscription Renewals?

By: Craig Vodnik

Craig Vodnik — Sat, 02 Apr 2011 15:23:21 +0000

Hi Clint,

Thanks for the information about your process of moving to a manual subscription model. Keep us posted as things become more firm.

I’ll definitely contact you during my next trip or two. Thanks for being a loyal reader.

cheers,

craig.

By: Craig Vodnik

Craig Vodnik — Sat, 02 Apr 2011 15:19:34 +0000

In reply to AA.

Thanks for the comment. It does depend a bit on the time frame that one looks at. For an annual subscription, I agree that 90% is a nearly perfect result. On the other hand, for a monthly subscription payment, like for SaaS products, 90% isn’t that unrealistic. Of course, with a monthly subscription, churn (the number of people that unsubscribe each month) grows as time goes by so if the product isn’t quality, even that 90% renewal number won’t keep revenue rising as time goes on.

cheers,

craig.

By: Craig Vodnik

Craig Vodnik — Sat, 02 Apr 2011 15:11:23 +0000

In reply to Jamison Shelton.

Hi Jamie,

Thanks for the comments. You definitely hit the nail on the head about communication. With the advent of social media, the risk of being trashed in public and ruining your reputation is something that seems like too great a risk to me, but every company has to make their own decision.

cheers,

craig.

By: Clint Wilson

Clint Wilson — Sat, 02 Apr 2011 03:00:19 +0000

Always a good read Craig and I think that if you leave it up to the customer around “auto” or “manual” then the company will experience success all the way around.

We are in the process of moving our “manual” subscription model to a SaaS model and so far the beta clients love the idea of opting in to any type of payment method supported on the Cazoomi Sync App platform.

Thanks for all the great reads here that have guided us to navigate the murky waters of subscriptions.

When you are in SF again ping me again.

Enjoy the weekend:)

~Clint
@cazoomi

By: AA

AA — Thu, 31 Mar 2011 15:12:53 +0000

Good article, but I think the yearly renewal rates you’re mentioning are a bit.. unrealistic – just for the same reasons you mentioned in one of your paragraphs (“However, as automatic recurring s…”.

Typically the rates are between 35% and 65% based on the product price, online payment method selected, product demand and target market – like Jamison said.

By: Jamison Shelton

Jamison Shelton — Thu, 31 Mar 2011 14:38:39 +0000

Great article. I have been involved with the transition from a manual renewal model to an auto-renewal model with a major security software vendor and the long-term financial benefits can be significant. Typically you will experience a lower initial conversion rate, but once the auto-renewals start kicking in, you can see significant year-over-year renewal revenue growth.

Two important points that I learned the hard way:

1. Auto-renewal acceptance varies greatly by country & industry, so do your research.

2. Communication is key. Emailing your customers before the auto-renewal occurs with a clear explanation or what is about to happen & how to unsubscribe from the auto-renewal process will help to maintain overall customer satisfaction.