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by Matt Manning

The business model for selling subscriptions online has been based, from the beginning, on the idea of an automatic renewal of a subscription as a core part of the subscription agreement. This is what was called the “til forbid” model in the business-to-business circulation management world of the 1980s, and that meant that the subscriber’s corporate credit card would be dinged on a periodic (usually annual) basis until the publisher was forbidden to do so. Prior to this, publishers would cancel and then re-start subscriptions, losing revenue in the process.

Ever since this model has been deployed, the trick for the circulation marketing team has always been in how to communicate that an automatic debit charge is coming (usually as quietly as possible) and how to handle the fallout from irate subscribers unprepared for the subscription renewal, which typically also involves a price increase.

There is some finesse to handling these interactions and successful publishers, along with the online services who followed them, were the ones who left the customers feeling a pang of subtle coercion but not enough annoyance to go out of their way to cancel their subscription.

These days, credit card issuers are actively addressing the issue of ‘zombie’ subscriptions by adding functionality to their online services that allow a consumer more transparency into their recurring transactions. I think there are lessons here for business-to-business publishers to use this tried-and-true model for their own renewals.

Some potential approaches to fine-tuning the automatic renewal process could include:

  • Performing an analysis of the subscriber’s usage patterns well in advance of the renewal date to highlight light users, who could then be offered training on getting the most out of their subscriptions. This also gives the customer retention team a heads-up.
  • Linking to a clear statement detailing how subscriber data will be used and specifying details on subscription renewal terms, potentially offering a “renewal at birth” option.
  • Adding a “deadman’s switch” to terminate a recurring subscription after a predetermined amount of time, perhaps five years.

This model focuses on customer ROI, gives invaluable customer satisfaction metrics, and offers the opportunity to stress the professionalism of the information provider. If carefully executed, this model should deliver results that are more than strong enough to justify the related expense of their implementation.


posted by Shyamali Ghosh on November 21, 2019

by Matt Manning

Starting a new information service is hard. Customer expectations are sky high and they’ll pay top dollar only if the information is unique and timely and the software tools bundled with the information are top notch. That means a lot of upfront expense and a significant gamble on the part of information entrepreneurs.

IEI has worked with a lot of entrepreneurs over the years and, in our experience, the keys to their success are as follows.

1) Design: New services need to be laser-focused on solving problems (i.e., meeting unmet needs).

  • Determine what people in an industry need to know.
  • Find (gather license, overlay, enhance) hard-to-find data.
  • Build highly useful/valuable tools around that data (e.g., compliance tools).

2) Execution: Reducing the risk of investment means using a tiered business model and carefully executing of the business plan.

  • Get revenue to flow quickly by having product tiers starting with an initial minimally viable service.
  • Keep expenses as low as possible.

3) Improvement: Renewal rates for the service are dependent on the ability to meet the ‘unmet needs’ of customers.

  • Continuous improvement of the service’s scope, depth, and functionality.
  • Usage monitoring with customer service interventions when usage dips.

IEI is very pleased to count so many major successful information service entrepreneurs as our customers. This success is no coincidence. IEI reduces our customers’ entrepreneurial risk via efficient and cost-effective processes. And our flexibility with customers who need to adjust their business models on the fly is also something that is simply not an option at other BPO firms.

Of course, it’s up to the services themselves to deliver on their value propositions to their end-users, but we think it’s easier for these customers to keep their eyes on the prize (their customers’ satisfaction) when they know IEI has their back, keeping their data accurate, deep, and compelling. No other firms have been designed to accommodate these commonplace realities of start-ups because other firms weren’t built by information industry pro’s. Our experience is our differentiator.


posted by Shyamali Ghosh on October 15, 2019