In this age of electronic banking, customers are getting more accustomed to recurring credit card charges, and less and less likely to want to write a paper check.
Setting up an auto renewal program can capture your customer’s preferred way of doing business, and might even improve your renewal rates. But, while the auto renewal experience is clean and simple for your customer, it is not so clean and easy to set up. This checklist will give you some idea of the complexity and help guide you as you set up your own program.
What is auto renewal?
Auto renewal offers your customers a subscription that they pay for by credit card. At the time of order, the customer agrees to receive a charge to their credit card at the end of the term to renew the subscription. The subscription “automatically” renews each year until the customers opts out of the program.
Marketing Decision List: How will you test auto renewal? On just one source? Or multiple sources? How will you measure test results? Will you wait through the renewal cycle? Will you set up a separate source for auto renew, or will it be a subset of existing sources, such as Internet, direct mail, etc.?
Credit Card Processing List: I strongly recommend that any publisher setting up auto renew offers will be more successful if they can use account-updater services of their credit card processing vendors, and that their fulfillment system can easily handle the details to get this updated credit card information. If that’s in place:
Link Letters: Before you charge the customer for their renewal each year, you need to notify them of the charge with a “link letter” that clearly states how much they will be charged, when they’ll be charged, and how they can opt out of the automatic renewal.
Will you send link letters via postal service or email?
If by email, how will you handle bounced emails?
What timing will you use – you need to strike a balance between having time for a second chance if the credit card doesn’t process and not annoying the customer.
An auto renewal program can be a very profitable source of subscriptions. But setting up the program requires a lot of attention to detail. Work closely with your fulfillment company and test every step of the process before launching. And allow yourself enough time (90-120 days) to properly execute all the details. If your fulfillment company is already handling this with other clients, it might pay to talk to those clients about any pitfalls they’ve encountered.