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Friday, Nov. 30, 2012 at 5:10 pm

Your New Online Business Model: Monthly Delivery and Auto Renewal

By Mariel Bacci
November 30th, 2012

The Auto-Renewal Business Model

It’s the holiday season for online shoppers, and we are here to give you another way to cash in your website this season!

Look at your products or service and try to realize if it is a gift that can keep on giving.  There are quite a few companies that use “of the month” or “auto-renewal” as a business model.  Have you ever considered applying the same concept to your brand? Maybe you do not realize it, but a lot of very popular brands become largely profitable because their products auto-renew every month.

Think of Proactiv, your gym membership or even checking your credit score. If you have ever ordered a product from an infomercial you know that they will be charging your credit card for something until you call them back and request a stop.  My grandmother gets a beautifully bound recipe book from Good Housekeeping every month that she has to return unopened to get her $19.99 back.  You can bet the first 3 times she got them she opened them not able to tame her curiosity.

Now, don’t get the wrong idea.  I am not telling you to consider scamming your customers.  The newer business model that we see implemented more and more is to let your customers know up front they are signing up for a 12 month surprise service. A new case of wine or in season vase of flowers every month for a year would be a lovely gift for many people.  The added benefit is that they will think of you every month when their gift arrives.  The true gift that keeps on giving!  I recently bought a biweekly vegetable delivery package to get local fruits and vegetables delivered right to my door, and I love it.

How To Sell Your Product As A Monthly Service

So now it is time to get a little creative.  Maybe you cannot see how your product or service applies to this model, but I guarantee that 90% of ecommerce sites have something to offer on a monthly basis to your guests. Here are some ideas:

If you matte and frame photos, ask your guest to send 12 pictures, each of which you will frame and send to someone special every month.

If you sell beauty or health supplies, it is easy to get people to auto renew something like vitamins or supplements-your visitor needs it every month anyway, and if you get them on an auto renewal program, you can offer them a nice discount.  If you sell perfumes, get them to sign up for once a year auto renewal of their loved ones favorite fragrance before the holidays.

Lets say you sell video games-set up an auto renewal program for your guests where you automatically send them your newest games (based on their selected genre) before they are available on your shelves.  Of course make sure they know they can return the game after 2 weeks if they hate it.

If you sell something a little different, like the service of seal coating driveways-an auto renewal service might be a tougher sell.  So why not think outside the box a little and talk to a local snow removal service  or lawn care specialist.  Try to do some affiliate marketing for those related types of business where auto-renewal is more appropriate.  Ask for your fee to be paid for every year of service with the customer, rather than just upon initial referral.

There are opportunities for your gift to keep on giving this year, so set up your website to accommodate. Afraid auto renewal will scare your guests away?  Here is an example of some optimized language to use when introducing your guest to your gift of auto renewal.

Thank you for your initial purchase of (your product or service). RECEIVE (your product here), AND STATE YOUR DISCOUNT OR PROMOTION HERE. To ensure you always enjoy (your product), you’ll receive a (the product your guest is purchasing, then a new (your product) every 60 days at the guaranteed low price of $49.95, conveniently billed to the credit card you provide today. Auto-delivery shipping is always free and you may cancel at any time. (Your Product) comes with a 30-day Money-Back Guarantee.

Need some help getting your auto renewal or monthly shipment program started so that your sales this holiday can extend throughout the year?  We have set up dozens of these programs and can help you to make them as persuasive and rewarding as possible. Or maybe you have some experience with monthly shipments or auto renewal and you can share some advice with us?  Please share any information you have about implementing this type of business model, successes, failures and lessons.

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Comments (24)

  1. the product or the benefits customers received should be worth enough, otherwise they will be thinking that they are being bullied by that company

  2. [...] Shades of Like in Brand-Consumer Engagement6 Optimierungs-Tipps für AdWords zur WeihnachtszeitMonthly Delivery and Auto RenewalLogistik als Reality-Check im E-CommerceDesign Language: The Organic AmbigramHier finden Sie auch [...]

  3. [...] Business information is quite interesting. Indeed, to develop a business, we need some a profitable business model. [...]

  4. Besides selling their products for profit, the companies should give their best products and services to their customers …

  5. Great subject and points. If the big boys are using Auto-Renewal and doing well with it, why shouldn’t the little guy use it. The obvious benefit of auto-renewal is that most people forget to ever cancel. If you can create an auto-renewal plan with small monthly payments I bet you’d be golden!

  6. The auto-delivery method of e-commerce is a great one for many businesses. It is hard, though, to find e-commerce software to support it in a way that a) lets you take subscription payments; and b) looks and feels like an e-commerce site. Do you suggest any software in particular?

  7. Auto renewal product marketing is very viable. A lot of times users forget to even cancel before the next debit. In as much as it is not encouraged to scam your customers but it gives you more in return.

  8. what a great article..a website is not just a website if you have commercially purposes, you need to optimize it, right?

  9. In as much as it is not encouraged to scam your customers but it gives you more in return.

  10. I believe that before you do that you should ask for your customer’s permission and that there should be an option to cancel it at any time otherwise it would be a complete scam.

  11. Very interesting. It is a bit trickier to apply with service business, but with a bit of out of box thinking it should be doable. Definitely giving this some thought.

  12. Well, i hate autorenew, because i often forget, that i have turned this option on. Therefore this is an excellent way for ltds, to get easy money from “stupid” people like me :D

  13. It is hard, though, to find e-commerce software to support it in a way

  14. A lot of times users forget to even cancel before the next debit

  15. “.. lot of very popular brands become largely profitable because their products auto-renew every month.”

    That is definitely true. Although, I would still say that that is also very easy way to ruin your brand image if you do it incorrectly. I’ve seen so many monthly subscription plans for services where it makes no sense at all.

    You should also send a notice to the customer before the renewal. This way they will remember to “unsubscribe” if they don’t want to renew and they will not feel scammed.

  16. Thanks Mariel Bacci for this informative post. Actually sometimes we face problems to continue our success on holiday season. So continue our business we must need to follow some unique & helpful ways. This Auto-Renewal Business Model is very helpful to continue our business as well on holiday season.

  17. I really like the optimized language you used to introduce a guest to a gift of auto renewal. I also like how stated at the end that they could cancel at any time, and they also receive a 30 day money back guarantee. That really brings a buyer to a good comfort level.

  18. I sometimes forget to cancel my membership and the company would keep charging me every month even if I’m no longer using the product. For me personally, I prefer to do my online transactions through Debit Card so I can monitor the recurring fees

  19. I have to say, this definitely seems to be the hot business model right now. I’m definitely thinking more and more about this avenue.

  20. I have to say, I really dislike online services with a monthly fee, as a good majority of them are hard to cancel. A one off fee with a trusted payment service like paypal is the only way I would pay for services from companies I little knowledge of.

  21. Being a customer I feel if a company is using such policy they should may be inform me prior to any transaction. May be they can have my cellphone number and message me once about the respective transaction and carry on the procedure after I give them a confirmation. This will help the company to build a good relation with their customers.

  22. Great way to make some quick money. Even better way to destroy your brand image.

  23. Thanks Mariel for such a informative post. This model is given a different dimension to me to look at the business mode.

  24. Thanks a lot for such a informative article. This has give a whole new dimension to the thought of running online business for me.

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Mariel is a GA certified analyst at FutureNow, Inc.

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