Managing product renewals
There was an interesting conversation over the last few days in the business channel on Post Status Slack, where members discussed the merits and potential pitfalls of various renewal strategies.
Joe Guilmette kicked it off describing how auto renewals for his plugin actually reduced renewal rates, compared to a lifetime plan they offered before. It turned out that they still kept a checkbox allowing people to opt-out of the auto renewal, and 87% of customers checked the box to not auto renew.
I think that’s where the flaw was, though I applaud Joe for his stance that he felt it was the most ethical option. Several members spoke up to share that they thought it was fine to not have an opt-out option (and I agree), as long as he’s makes it simple enough to otherwise cancel. I like what Zack Katz had to say about it:
Putting a checkbox before people buy so they can cancel subscriptions before they even start is having them judge the future value of your product before they try it. It’s forcing them to ask “do you want to marry this person” before dating.
The answer will be “no” instead of, “I’ll cancel if I don’t like it.”
I think that is well put. Also James Laws noted:
Someone unchecking that box at checkout is not the same as them saying they want to cancel. It’s someone saying I don’t know enough about your product or my needs a year from now and so if you are going to ask me right this moment if I want to be charged in a year, I’m going to say no. One year from now my answer might be quite different.
I thought this conversation was really good. There was more to it, including at least one member, Thomas Maier, that also decided to stop sending renewal reminders, and he noted that they only receive a few additional refund requests per month — and customers have been amenable as long as (which they do) they offer the refund right away.
I personally like sending the reminder emails, and though I know it costs renewals, it’s my personal preference.
I may do more of this in the future, where I try to summarize a Slack conversation, even though I can’t capture the whole thing. Be sure to dig in yourself!