The credit card gremlin in your subscription renewals
When your publication goes to renew subscriptions there is a near invisible problem that can become huge...it's all about credit cards, and Paul Larsen has the answers. Why credit cards? I asked Larsen about it prior to this talk at the MarketingSherpa "Selling Online Subscription Summit 2008".
Why are credit cards such a problem for online subscription marketers?
As times goes on, things happen to credit cards, those things inadvertently cause the relationship between a merchant and a customer to break. I help publishers and merchants understand what they can do pro-actively and reactively to mitigate the damage that comes over time.
But what’s the big deal? Don’t most subscriptions just roll over and bill the credit card automatically?
No. When they go on an anniversary date to bill you will typically face problems with over 40% of those credit cards.
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How bad can this get?
Hannaford, the East Coast grocery chain just experienced huge breach of their credit card files. That means that millions of credit card accounts are going to be shut down and new cards are going to be issued. All of the continuity and subscription relationships that were based on the previous card are going to blow up, people are going to show up at Easy Pass and they’re going to get a red light and it’s not going to change to green because they forgot that the credit card that was shut down because of the Hannaford breach.
You can read about this at this link. Aside from this costing Hannaford about $250 million to fix, they faced thousands of angry customers who had their compromised credit cards replaced. Next time their credt card connection failed them going through Easy-Pass they will blame Hannaford!
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Isn't this a problem for IT, not for sales managers, marketers, and publishers?
When I first spoke at Marketing Sherpa, a marketing conference, 3 years ago, 20 glassy eyed merchants came up to me after my presentation and said, “I’ve got this problem, and I don’t know what to do about it, and it’s killing my bottom line.” These issues may start as computer problems but very quickly become sales and marketing problems.
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What can subscription marketers do about all this?
The primarily issue is churn and it’s churn that happens within a brand that causes re-issuing, and there’s also churn that results from competition between brands (credit card brands),there are billion credit solicitations sent to people’s mailboxes so there’s tremendous competition between credit card brands as well.
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Larsen identifies 5 major problem areas: Re issuance of credit cards, competition between credit card , credit limits, and softening economy, those are the four. The fifth one is poor transaction handling.
Next time you try to renew those magazine subscriptions. Look out for the credit card problems!!!
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Preventative measures: Larsen's best practices on what to do:
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