How Membership Organizations Automate Renewals Without Losing Members

Renewals are supposed to be revenue drivers for membership organizations, because they bring in fresh batches of payments. However, sometimes these very renewal processes become churn drivers for them, discouraging members from continuing. There are various reasons behind that, some most obvious ones being expired cards and failed payments.

The only solution for combatting these issues is renewal automation. But sometimes even automation can hurt retention when it is rigid and impersonal. What memberships actually need to protect their revenue is smart renewal automation that shifts members from one billing cycle onto another smoothy and flexibly.

Let’s now explore how exactly membership organizations can pull off renewals without losing the very members they’re trying to retain.

What Makes Renewals Challenging for Memberships

Renewals are of two types: manual and automated. Manual renewals are becoming outdated as members expect speedy payments that don’t need resubmission of checkout forms. If organizations still renew members manually, they’re missing out on a lot. First of all, they face a higher churn risk as members need to go through traditional payment submission procedures. Secondly, they can’t collect payments right on dot. Thirdly, they can’t onboard more than a few members at a time because it’s difficult to manage more than a certain volume of payments by hand.

Due to all these reasons, manual payments are now rapidly becoming automatic. Memberships are signing up for systems that process payments automatically and renew members’ plans. But there is also a downside to this system: renewals are treated like simple billing events and become purely transactional.

This makes organizations lose visibility into the actual member experience behind the payment. Since automatic renewals are fast, failed charges may go unnoticed, silently dropping members off. Similarly, when your billing system doesn’t allow for personalization, your payment emails can seem monotonous and unfriendly, often getting mixed with the other subscription emails that your client may have in their inbox.

This creates distance between your membership and the members, and continued disengagement can lead to churn. Therefore, the challenge for memberships today is not implementing automation—there are many software in the market that do that for you. Rather, it is ensuring that their automation doesn’t come at the expense of retention. With every renewal cycle, organizations must re-earn their members’ commitment as well.

Why Members Drop Off at Renewal

Members can drop off due to many reasons.

Payment failures

The most prominent reason of involuntary churn is payment failure. This churn is involuntary because sometimes the members don’t even know themselves when their membership gets suspended. And this usually happens when there’s little to no communication by the membership organization. Whenever cards expire or face declines, your payment system eventually suspends members’ plans, silently increasing churn.

Lack of communication before billing

Sometimes payments fail only because your members aren’t prepared for them. And that’s the reason why they don’t have funds arranged or card issues resolved beforehand. Therefore, if organizations don’t send billing reminders, they face higher transaction decline rates.

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No perceived value at renewal time

When members sign up for a membership, they see strong value in it. Over time, this value perception fades, not because your membership service loses quality, but because the service may become routine so its value doesn’t remain as visible or top-of-mind for members. So it’s the job of the membership organization to consistently reinforce clients’ value perception.

You need to regularly communicate value before billing to make customers realize the benefits they are gaining from you. Otherwise, their experience can become forgettable, especially if members aren’t using your service actively. This makes renewals seem like just another cost for members, and not a continuation of value.

Rigid billing (no plan changes allowed)

Members may not want to continue with the same plan they signed up for. They may wish to change plans (i.e. upgrade or downgrade). If your billing system is rigid, it doesn’t allow such changes to happen automatically or as smoothly as members expect. This can make members lose trust in your organization, as they don’t get their request fulfilled instantly.

This usually happens when your billing platform doesn’t support proration i.e. the automatic adjustment of bills when plan changes are requested. In such cases, you need to ask members to cancel their current plan and sign up for a new one from scratch. And this carries high churn risk.

6 Smart Automation Strategies

Let’s discuss core smart automation strategies that let you renew smoothy without disrupting member experience.

1. Pre-renewal engagement

Organizations can engage with members before the actual billing event takes place. Billing or renewal reminders are one engagement tactic. It’s a great practice to always send renewal reminders so that your members prepare the required funds beforehand. Since such notifications make charges expected, members aren’t taken aback when their payment is deducted from their account. And they know what exactly the deduction is for.

Another engagement tactic is sending pre-renewal emails that reinforce your membership’s value. So that members know exactly how much value they’ll be losing by losing the upcoming renewal.

2. Smart dunning (not aggressive billing)

Smart dunning involves intelligent retry logic. With an advanced membership management system, you’re able to implement that as you’re able to personalize the schedules for payment retries.

Additionally, instead of sending harsh messages after one failure, you can send gentle reminders encouraging members to make their payments soon. The emails can become increasingly urgent depending on the delay in payment.

3. Flexible renewal options

Opt for a membership billing system that allows instant plan changes. Members should be able to change their plan right before renewal time so that they don’t have to pay for their existing plan again.

Moreover, allow payment grace periods. Don’t suspend a member’s plan right when their payment fails. Instead, give them a grace period (3, 5, 7 or a custom number of days) so they are encouraged to resolve their issues before the deadline.

4. Frictionless payment updates

Cards can get expired and members’ online bank accounts can get suspended. In such cases, you need to have a mechanism in place that lets members update their billing information. For example, update card details or add another payment method. Therefore, you should ensure that your payment system supports multiple payment methods, and makes it easy for members to switch between them.

5. Pause and resume options

Sometimes members feel like skipping one or a few renewals because they’re busy dealing with something else, and may not have time to dedicate to your membership service. But when memberships only offer cancellation as the backout option, members are forced to cancel even if they don’t want to. If they don’t, they’ll be charged for something they didn’t use.

That’s why offering pause and resume options is a must for memberships. These options let members leave membership service temporarily, and then come back whenever they feel like. Thus, it lets members avoid unnecessary payments without resorting to cancellation.

6. Personalized automation

Renewals seem thoughtful, not rushed or harsh, when they are personalized. Memberships can segment customers by their plan type, preference or behavior to tailor their renewal message the same way. They can mention the member’s name and plan or product in the renewal email instead of simply attaching the calculation of charges.

Generic automation or payment messages treat every member the same, and can get confused with similar messages by other subscription businesses. Personalized and member-friendly emails are what make you stand out, and keep members engaged.

SubscriptionFlow Helps You Automate Renewals Smartly

SubscriptionFlow is a membership management software that doesn’t treat renewals like simple billing events. It becomes an enabler of intelligent automation for you. So, it doesn’t only automate the processing of charges, but also fully assists with member lifecycle management. Using the various features that this platform offers, you can automate renewals without putting your members at risk of churn.

Flexible renewal schedules

Offer different renewal cycles and durations. Such as monthly and quarterly cycles. And then renew each cycle smoothly, at the right time. There are no renewal delays, making payments fair and customers satisfied as their payments are fast and error-less.

Many dunning tools

From payment retries to grace periods, there are a number of dunning tools that you can use together for more efficient payment recovery. SubscriptionFlow lets you utilize AI-optimized payment retry intervals that adjust to each customer’s unique payment patterns, and increase chances of recovery.

Smart communication workflows

Send personalized communication to members in the form of emails, messages or in-app notifications. You can easily set up billing reminders, value-reinforcing emails, discount or special promotion notifications and more. Always keep your members updated and engaged by sharing the latest information.

Friendly member portals

SubscriptionFlow offers a member portal to each of your members from where they can control their membership plan. For instance, they can change plan before renewal or after (the system applies proration to keep plan switching smooth). They can update payment information as well and opt for pausing the plan when they don’t feel like renewing. Better plan flexibility and greater member control make renewals feel more friendly and boost retention.

If you want to automate your members’ renewals without hurting retention, you’re in the right place. Sign up for SubscriptionFlow to achieve higher member loyalty with advanced renewal features.