For publishers of magazines and magazines, keeping on their subscribers from year to year is a big challenge. It is customary to calculate a “churn” (dropout) of at least 30 percent.
After we switched to Periode.no, we have managed to reduce the dropout to around 10 percent!
The Garden Guide is a fairly newfangled, paper-based gardening magazine, which is sold as an annual subscription.
In the beginning, we sold the subscriptions through a regular online store (WooCommerce), and had no solution for recurring payments. We therefore had to send customers an invoice, in which they prepaid the upcoming year's subscription.
Due to previous experience with billing for private customers, we looked for another payment solution for subscriptions, and discovered Periode.no.
Period is a subscription system based on Vipps fixed payments, where customers, upon drawing up the subscription, automatically agree to draw on Vipps at the next due date. It is also very easy for customers to manage their subscription — whether they need to change their address or stop their subscription.
The great advantage of Period, is that we do not have to spend time on invoicing and not least follow-up of invoices.
To take a concrete example:
At the time of writing — over 1 month since the due date, and 6 weeks since we sent out invoices to just over 1300 “old” subscribers, only 60 per cent have paid the invoice. 40 per cent have either cancelled/announced that they do not want to pay the invoice, or have not paid, nor contacted!
There is quite a big difference between 10 per cent and 40 per cent — for us a loss of close to NOK 200,000.
As a newly launched subscription magazine, it also feels more meaningful to expend energy on making great products—than spending valuable time on payment follow-ups and sales.
The “main problem” with pre-billing subscriptions, is that customers perceive this as “optional” to pay. Many people think for some reason that if they just “yank the invoice”, then the payment requirement goes away.
People also have little understanding that there are costs associated with making and sending out invoices, or that they themselves have a responsibility to keep up with deadlines for termination.
The challenge when selling a product that people strictly don't “have to have” is that it's easier to prioritize it away. All subscription-based magazines, newspapers and online newspapers find that customers “come and go”, and it takes a lot of resources to follow up.
Another problem is that mass-mailed emails tend to end up in the recipient's spam mail. This also applies to invoices sent via accounting systems such as Fiken, Visma etc. It is difficult to know whether the invoices actually reach the recipient.
For us, it has also proved to be a problem that a part of our customers perceive an invoice sent from Fiken, as an attempt at fraud. They simply do not dare to download the invoice, as they fear that this is “hacking”.
The result is that we have spent a LOT of time communicating with customers by email, phone, SMS, in social media etc. “Complete chaos” is a good description of our experience with bulk billing of subscribers.
Similar experience with subscription renewal via Period, was that this went completely unproblematic. Of the over 600 drawn on Vipps, only 4 people have contacted wondering why this has happened.
A few (7.5 percent) were not drawn -- for example, because there was no money in an account. After a few attempts, the subscription was stopped. I then sent them a nice email explaining what had happened and offering to sign up for a new subscription in Period. A fairly large percentage chose to “come back.”
Some customers will probably think that it is “rude” to only withdraw money from Vipps at maturity. No matter how thoroughly you explain how the subscription works, there are some who do not get it with them. People rarely read “terms and conditions,” so it's important to be clear that this is an ongoing subscription.
It is also good customer service to send a message to the subscribers a little while before the permanent move is made, so that they are aware of the move and can possibly step in and unsubscribe.
Other “counter arguments” we have received are that customers find it incomprehensible with fixed moves, they want to get invoice by which they can decide for themselves what date is paid. This is a legitimate argument, but this is a service they nowadays have to expect to pay extra for in the form of invoice fees, fees from the bank, etc.
It's also no secret that many people “forget” invoices — that's why the vast majority of subscription services require you as a customer to accept some form of fixed payment — whether deductions from cards, direct debits or Vipp's fixed payments.
The advantage of using Vipps, is that the card details are always up to date, as most people use Vipps quite regularly.
In Period it is possible to offer payment both by Vipps and by card, but we have chosen to offer only Vipps. Almost everyone has and uses Vipps. To the few who do not have or want to use Vipps, we offer to send invoice. This applies, for example, to those who need vouchers for company accounting.
We have an agreement where there are no fixed agreements -- we pay a fee of 2 percent per payment. In addition, the fee to Vipps is 2 percent. That is, we pay a fee of NOK 16 per subscription — out of a subscription price of 399, -.
In monetary terms, it would possibly cost less to send an invoice, but firstly it takes a LOT more time, and secondly, as mentioned, the payment percentage is much lower.
We at Hagegidden therefore save a lot of time and a lot of money by using the subscription system Period rather than billing our subscribers.
Please feel free to contact me, if you have any questions about the use of Periode.no that are not answered in this article.
bjornhild@tastatore.no
41440980
