Practitioner pattern · Sara Grana (Yousician, Babbel)
Send an offer to people who turn off auto-renew
Looked great, but users refunded first and then took the offer; net negative
What they did
What happened
In their words
Stop Celebrating Conversion Wins Before Checking Renewals – Sara Grana, Yousician
Sara Grana… group actually is performing better than the test group because they are renew more." So one of them is like this not looking even the time. Sometimes it's fine to roll out, it's fine, you have a win, you roll, but then look back. And then the second one is within the same moment in time, the same snippet in time, but not looking at the right metrics. There's sometimes that we forget to look at some metrics. I give a really clear example.
Sara GranaSometimes with a win-back campaign or people that cancel the auto-renewal, okay, when they do that, we're going to send an offer, right? Okay, they cancel it to renew, we send an offer because then maybe we get them back. Okay, great, we do this. Great, amazing numbers. Okay, you look a bit more deep and you realize, oh, a lot of people are cancel, putting their auto-renewal off right at the beginning, and what they are doing is they're asking for a refund and then they're getting the offer. So you are actually net negative. So I think that's also something that tends to happen, especially with refunds and chargebacks and because people tend to forget about those, they never happen. And yeah, you might be, even without waiting in time, you might be messing up with your system. So you really need to understand your whole set of metrics and how do they all work together? Because most of the cases, something goes up and something goes down and you need to make sure you know what is going on.
David BarnardI hear this all the time with price testing where you double the price and you exactly match the revenue. So conversion cuts in half. Sometimes you'll get that win where you double the price and you do get a 25% lift in average revenue per user or something like that. But you always got to be looking for those downstream things. Like you said, one thing goes up, another goes down. When you look at the entire lifecycle of a subscriber, any one …
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More from this episode
- Chart revenue from new, upgrading, renewing and returning subscribers, then explain each spikeSurfaces which past decisions moved revenue, e.g. a lifetime plan launch; no numbers
- Set calendar reminders to recheck price tests at 3 and 6 monthsCatches price 'wins' that flip once renewals come in; no numbers
- Before calling a paywall test, wait two weeks and check refunds and chargebacksRefunds show up fast and can erase a paywall win; no numbers
- Judge a new lifetime plan against what a subscriber pays over timeTests otherwise wrongly crown lifetime, e.g. 250 vs 100 instead of 250 vs 300 euros
- Split renewal rates by plan, discount, and web vs app before reading themWeb buyers renew much better, so blended renewals rise from mix shift alone
- Use monthly-plan renewals to set a warning threshold for yearly-plan test winners
Tags: win-back, refunds, offer-abuse