Explain rebill ratios

[Xstr8guy]

I had read your post before it had been even been responded to. I was gonna respond, but one thing led to another and I also feared being flamed.

Flamed? By me?! I would never! Lol. I may be bitchy sometimes but I usually only get mean with people that know me well enough to not take it personally.

Do not fret trying to come up with a formula until your paysite has a longer history with numbers to crunch.

Lol, that's good to know! Because these 'industry standard' figures posted in this thread have me really depressed. I have a long way to go to be standard.

[Xstr8guy]

As many wrote above, the trial is "converted" in the first month. A pay site should have 50-70% converted from trial to full membership.

Now we are talking about the second month billing, the rebill. It seems that three months is an industry standard, and those that rebill for four plus months are the gold that is sought.

Do not fret trying to come up with a formula until your paysite has a longer history with numbers to crunch.

I have another question regarding the 'industry standard'. How is it possible to have such high retention and trial-to-conversion ratios in the scenario where short trials are not offered and 50% of new members are already choosing non-recurring options. That immediately skews my figures. :uhoh:

[Lee]

How is it possible to have such high retention and trial-to-conversion ratios in the scenario where short trials are not offered and 50% of new members are already choosing non-recurring options.

Because the members joining on the recurring basis are already sold on the content to be found inside the site, if the members area delivers what is promised, you have a very good chance of keeping members rebilling for months.

Of course, the 'retention' figures being given in your scenario arent a true representation of the site since the accuracy of those figures is already cut in half. The figures are a crapshoot.

Again, from a programs perspective, another reason NOT to offer non-recurring memberships, your figures will automatically be scewed from the get go because you dont have a true representation of all the rebill data.

Regards,

Lee

[marcjacob]

I dont know if your just curious or want to get a formula for a reason, or just studying for a maths degree. If its just to see how well your site retains, i would be inclined just to look at the average number of months your members stay for. The work you do on the site will then see an increase or decrease in this, telling you everything.

If an affiliate asks about average retention, all they need to know is the average number of months members stay for.

Ive probably missed the point, this thread confuses me.. too many numbers

[wnc]

If an affiliate asks about average retention, all they need to know is the average number of months members stay for.

Ive probably missed the point, this thread confuses me.. too many numbers

Good question... interesting question. I hope UKNAKED does not become bogged down in number crunching, when others just wish the site to create the next update.

I do see many sites via my affiliate income that recently the surfers select a SINGLE MONTH. The surfer feels more control? And of course, the affiliate doesn't get credit when the cookie expires and they become member again.

[Xstr8guy]

Good question... interesting question. I hope UKNAKED does not become bogged down in number crunching, when others just wish the site to create the next update.

I do see many sites via my affiliate income that recently the surfers select a SINGLE MONTH. The surfer feels more control? And of course, the affiliate doesn't get credit when the cookie expires and they become member again.

Ah don't worry about us. We are updating 3 times per week.

We're still a young site but I've just been a little disappointed by rebills so far. I'm trying to increase retention and I needed some way to judge the results.

[Lee]

i would be inclined just to look at the average number of months your members stay for. The work you do on the site will then see an increase or decrease in this, telling you everything.

In theory you are right however, we live in the real world. Program owners need a lot more information than just the 'average length of membership' when it comes to the running of the program in terms of profit/loss and revenue generation.

For example, lets say you are paying out $40 per join because your average retetion of a member is 4 months, fine, if those members joined using a single monthly rebilling cycle but, what if those members joined using a multi-month membership? $50 for the first 3 months and recurring monthly after that?

Its a 4 month retention but the amount of money being made is substantially different...

$29.95 x 4 = $119.80

As oppose to...

$49.95 x 1 + $29.95 = $79.90

On the PPS business model the program will lose $40 on each and every multi-month membership when compared to the single monthly recurring option, or to look at it another way, $80 ($40 lost revenue plus $40 affiliate payout) of each and every sale.... More than the value of the 4 month member to the program owner, throwing away another 100% of the sales value is bad business, no matter how it gets sugar coated.

In essence, without solid numbers, based on initial sales to full sales, full sales to rebills, how often certain types of join options rebill and what the sites retention is, overall and by join option, a program could become a loss to the owner in a relatively short space of time and id have to wonder how they were able to pay high referrals when all they were interested in is 'how long the member stays a member'.

Solid numbers also give you a much better judge at how well new updates, layout changes or upsells and / or feeds work in a members area, lets say you add a new feed one month, at the end of the month, you will be able to see how much longer (if at all) that feed made your members rebill and how much extra income the feed added to your bottom line profits.

If the feed cost you $200 a month but it added an additional $500 profit to your bottom line, you keep it. With 'average' membership lengths, this type of information isnt available to a program owner, which in turn means the program owner could be making lots and lots of bad decisions about his/her paysites.

Number crunching, may seem like a waste of time and effort to many but the bottom line is that the number crunching is what will ultimately make or break your business.

Knowledge really is power when it comes to running revenue reports on individual paysites and a program as a whole.

Regards,

Lee