Thoughts And Newsletters

Best Practices for Paid Subscriptions

Selling services and products using a subscription model seems to be all the rage these days. Some of the most popular services, like Amazon Prime, Spotify or Netflix are provided as a subscription. It used to be just magazines and some product-of-the-month like wine-of-the-month, but now it seems like everyone wants to get in on this business model. And why not? The subscription service and billing model offers great benefits to both the merchant and the consumer.

Most of you are probably already believers in the subscription model, but let’s do a quick revisit of why do we want to sell things on a subscription model, what are the benefits? Here’s the advantages for the merchant: predictable revenue stream, lower billing costs (no monthly invoice), and typically a lower initial price to entry for the consumer. For the consumer: the advantages are just the other side of that coin – not too much money down, no monthly invoicing, and fixed (mostly) costs going forward. Subscriptions sure seem great.

The purpose of this paper is not to convince you to use the subscription Model – I think that would be preaching to the choir. The purpose is to tell you how to effectively and efficiently manage your paid subscribers to maximize your revenue while providing the best customer service possible. Let’s begin with a little primer of what we mean by Full Service Paid Subscription Processing. We call it Full Service because the services that are provided are all the core functions necessary to provide comprehensive service. We handle the lifecycle of a subscriber from order processing thru renewal including ongoing customer service and reporting… so soup-to-nuts. You as the audience development person create the campaigns and the client facing content, but you don’t worry about any of the back-office, customer service and reporting issues. (All of which are usually major headaches and costly to provide in-house).

Here’s the major services areas that are required for successful processing of paid subscriptions.

  • Capture of order –In simplest terms, address/term/amount.
  • Maintain/Service subscription – Provide product/service and ability to change account information, customer service. Be able to ‘age’ and earn on the subscription.
  • Renew – Various methods and processes to keep the subscription going. Continuous service, handle groups, donors.
  • Integration, Gatekeeping and User viewing habits. Content Management Systems (CMS) Integration via API.
  • Report out key metrics. Active subs, revenue, renewal rates. You need to have visibility into how things are going…
  • Security. This needs to be an integral part as we are storing sensitive information.
  • Other revenue opportunities. Donations, Ancillary products and services to help you leverage your content relationships, cost containment.

Before we dive into the details – Let’s clarify the type of publications and subscriptions we’re going to be talking about. To us, and hopefully to you too, every subscriber is precious. That is the mindset you must adapt to be successful at growing your subscription base. It’s much harder to acquire a new order than it is to take care of and retain the customer you have. Many publications have been focused primarily on building an audience and will either give their content away for free or charge a ridiculously low rate that is subsidized by the advertising dollars. For these publications, subscription revenue is not considered a vital revenue stream. I’m not going to be talking about those publications. I’ll be talking about those publications that believe that their content is valuable, requires lots of time and money to create and believe they need to be paid for it. I’ll provide some examples of how to take care of your paid subs where subscribers pay real money for a subscription. There’s a worn adage – don’t give up subscription dollars, for advertising pennies. That illustrates the type of publications and subscriptions we’re going to focus on today.

Let’s look a little further into what is being done in each of these service areas.

Orders come in thru various mediums.Here’s the common forms of order taking and our recommended best practices:

Web – Web form/API – becoming more common

  • Offer clearly stated. Fewer clicks the better. Use pre-stored cc #?
  • Real-time cc authorization.
  • Are your forms responsive – can I order it from my smart phone?
  • Handling duplicates – strict on email address – security concerns?
  • Focus on making the process as smooth as possible. Fewer pages and clicks.

Email – Use a tracking system to monitor

File – Uploads. Hopefully in a standardized format

Mail – Paper/Fax – scanned or processed by manual data entry

  • Design forms to be simple to process
  • Automation – scanning, finder numbers.
  • Other lower-cost locales – image and have entered.

Phone – Hard to automate. Empower reps and give them leeway in accepting different prices.

  • Upsell other pubs – or products, special offers.
  • Use Automated Call Distribution.

Categories of Information collected

  • Delivery Information, Uid/Pass, IP, demos, web activity
  • Term – Time or issue based – this is important if you’re going to be considering frequency changes or access to online content.
  • Amount – are there any sanity checks in place to keep incorrect data/values that will rob you of your agreed upon revenues, or worse overcharge a customer?
  • Method – Cash, check, credit card, paypal, bitcoin, foreign currency, wire
  • Type of order – Paid, bill-me, auto-renew, donor, group
  • Payor – Donor, Group, Separate billing address (company, but not a group)

You need to consider and handle these variations in each of these categories when processing an order so you can accommodate the subscriber and take the order. You should not be putting yourself in a position to say no to an order. However, let’s make sure that we keep the type of order we want in focus. From our experience, the most desirable order is a paid one, at full price that is setup to auto-renew.

Other revenue opportunities at order term is offering levels of service. We’ve seen it work well for some clients that offer both print and digital separately, to combine them for a nice bump up in price compared to just a single level of service. Basically, a very significant amount of subscribers are willing to pay extra to ‘get it all’. They want print and the want online, by limiting them just to one choice you are limiting your revenue as an online add-on to a print typically comes at no additional expense to the publisher. We’ve seen this work well for many clients resulting in some real revenues. We’re also seeing some clients that are asking for donations, especially for non-profit political issue publishers.

To sum up best practices for processing orders, most of the processing of the order that is done from physical media can be automated at the fulfillment house with the use of either scanning, finder numbers or imaging or simply data entered – like so:

http://gph.is/2oW0XKw

Here’s what I’m talking about:
https://www.reddit.com/r/oddlysatisfying/comments/3e5rlr/battery_sorting_machine/
https://www.reddit.com/r/perfectloops/comments/6cygaz/l_paper_cup_machine/

Maximize revenue and renewal process efficiencies:
https://gph.is/VwHqhx

  • You need to be able to control several key properties of the account that change over time. We consider the best way to do that is to cycle the file every day, so it reflects reality. This means you need some heavy-duty computing power to run thru the entire file every day and check and possibly update every account.
  • Expiration date. You can control the expiration by using either setup in either issues or actual date.
  • Income earned. If you use accrual accounting, you need to earn money as you serve issue. You also need to adjust if you change the length of the subscription or even when a new order starts.
  • Address changes. Consider ones that are snowbirds.
  • Billing Address vs Shipping Address.
  • End of Credit Service.
  • Gracing Rules.

Customer Service

https://gph.is/155XgZa | https://gph.is/1sMLTzF |

  • Customer service standards for subscriptions are to answer a call within 20 seconds… It’s interesting to note that this is a standard that is not being met by almost any other industry. Certainly not one that has undergone the decline that publishing has.
  • Try calling any other consumer facing customer service. Like your cable company or ISP..… So now that we’ve ranted about expectations, let talk about the best ways to meet them.
  • Live Human Customer service – automate and measure what you can so you can control and manage.
  • Use an ACD to measure and alert to call wait times. Should provide reporting.
  • Use calls as an opportunity to upsell
  • Don’t allow subs to leave a message – inefficient.
  • Use a system to track and respond to emails – We recommend something like Help-Scout.

Customer Service on the web

  • Create web pages for almost every customer action. Should have over 14 customer service pages.
  • Confirm action taken with page and email
  • AI chatbots have now reached a level of sophistication that they are not a joke. Much more affordable than in the past and easy to install.
  • Opportunity to upsell or ask for more money or a donation.
  • We don’t recommend allowing customers to cancel online. However, if you are setting them to auto-renew with an online order, laws in California and elsewhere require you to give them an online way to opt out of auto-renew.

Service the account

  • Produce “label” file or provide APIs for client access. Maintaining the data so it’s current is important when a change in status occurs and needs to be reflected on the current file. As an example, if you produce a ‘label file’ and that is used to control access to your site, then that is a static file that will not reflect if the subscriber cancelled early.
  • Part of servicing the account is If you have Digital editions who is supplying the platform? Are accounts being checked via API? – or are they using a static file? Just be aware of the benefits and drawbacks. Do you need to have both a flipping book type of digital edition for the issue and also up-to-date content on your website?  Do both your digital edition and website look good on mobile? That’s a question for you, we just want you to be aware of the different ways to hook either of those up to your subscriber DB.

Maximize revenue and renewal process efficiencies:
https://gph.is/VwHqhx

Renewal Processing (Expiration date is the trigger)

Auto-renewals

  • Multiple attempts – even vary time of day/week/month
  • Credit Card updater. Great service.
  • Enhanced charging services (eg. Vindicia).
  • Fraud detection.

Non-auto-Renewals

  • Email – give them a link and make the process painless.
  • Print – not very desirable, but still kicking. Convert to auto-renew?
  • Tel/Other – opportunity for upsell – multiple years
  • Mail renewal promotions at Standard Mail Rate

Bill Processing (Order date triggers)

  • Email – give them a link and make the process painless.
  • Print– First class mail is required for all invoices mailed.
  • Tel/Other?
  • Some corporate clients will only pay on an invoice.
  • Some clients like to automatically generate a bill for a failed auto-renewal effort.

Integration

  • It’s your data and it can be useful to you and other vendors, having one up-to-date single copy to refer to is Database 101 and should be your goal. Integration though can be a time and money suck.
  • Fulfillment vendor should have APIs and FTP site
  • Fulfillment vendor should be able to call APIs and txfr files.
  • Amount of work to integrate websites can vary wildly
  • Take advantage of new tech:
  • Json Restful APIs
  • Integration at the browser instead of the server. Typically done by using Javascript and other integration tools allow clients to retrieve the offer details such as promkey, rates, terms, but have the client completely control the design.

 Gatekeeping

  • Good content costs $ to produce. You need to protect it. Video: If your content is good, you need to be paid for it: https://youtu.be/fMCaj44AkJA … (In case you don’t remember – he got paid half..)
  • Path that gatekeeping has taken.
  • How much work to integrate paywall?
  • Paywall options
  • Paywall flexibility
  • Keep track of articles read

User viewing habits

  • As the amount of data you can collect on users continues to dwindle, most of the activity that your users are doing on your site is still legally trackable. This is a fast changing area and you need to be careful that you are legally able to share that data with others on an individual user level, but you’ll be able to use that data internally to see how much interest your subscribers have in your content and what articles they are reading.
  • Video: Screen manipulation from the Minority Report. https://gph.is/1OM1vJQ
  • Ability to see the basics easily
  • What is my renewal rate?
  • When are people expiring?
  • How are my efforts working?
  • Dashboard – how many orders this month by source, how much revenue, upcoming expires
  • Ability to drill down with query tools
    • Current file queries
    • Transaction files
    • Download files

Security is too often an afterthought. Too many user experience and marketing projects that I’ve seen are not designed with security in mind or have not been revisited as different threats and vulnerabilities are exposed.

Video: https://gph.is/28O9tDt

Threat Vectors

  • Email. (at server and at client – different solutions). Even scanning attachments you are vulnerable to phishing emails.
  • PCI audit – Huge investment in time and infrastructure.
  • Fraudulent charges (CC# harvesting) (Stop with captcha, x # of tries)
  • Fraud detection – monitor attempted charges.
  • Encryption of data files. PGP security or higher.

Selling Ancillary products – example stores

Ability to bundle ancillary products with subscriptions.

Asking for Contributions

Raising Prices –

  • Does it work? https://gph.is/18uGJdA | https://gph.is/22YR25b
  • Lots of trepidation on raising prices – hard to do if content can be had elsewhere at no cost.
  • Customers in certain positions have less price resistance.
  • B-to-b paid with no controlled pubs in same space.
  • B-to-b “bible of the industry”
  • Clients that have raised prices – what happened.
  • Clients that have kept prices the same – what happened.
  • Clients that have lowered prices – what happened.

Cost containment.

  • Eliminate paper usage whenever possible.
  • Have subscribers self-serve on the web
  • AI Chatbot
  • Email as first effort always

 Final words: The clients that we see succeed produce content that is indispensable to their audience and have focused on making the payment process as easy and efficient as possible. They provide quality customer service as that is the expectation for paid subscribers. They are increasing revenue from readers through subscriptions, membership, donations, events, and other related products.

Scroll to Top