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5 Ways to Increase Retention Rates
for Automatic Renewal Offers
With automatic renewal
offers, the renewal rates after the first year are more
dependent on credit and debit card processing practices than
they are on marketing tactics.
Here are some of the best tactics I've learned over the
years from my friend and consultant, Paul Larsen:
TIP #1. Attend the
Direct Response Forum's
annual conference on August 11-13.
It's the annual conference where 700+ ecommerce and direct
marketing executives meet with the credit card industry for
informational sessions and networking.
Be sure to attend the session on Credit Card 101, as well as
those on Recurring Revenue offers, where you'll find out the
latest tips to increase processing success.
TIP #2. Send through expired credit cards with no
expiration date. Stripping out the expired date
and sending the card to be authorized with an empty field
will often produce almost the same acceptance rate as having
the correct date. This is the recommended protocol by
both major credit card associations.
TIP #3. Use the VISA and Mastercard Updater Programs. These
programs enable you to send your credit card files to them
and have them updated with new, corrected numbers when
customers change card plans, issuers absorb other issuers,
and so on.
Tip #4. Recycle soft declines -- i.e. temporary
declines for cards above their spending limit -- every 10
days. The success driver is not the number of
times you recycle, it's the length of time between attempts.
Tip #5. Use BIN Tables strategically. You
can obtain BIN tables from your payment processor that will
identify the card issuer. This enables you to
proactively request updated credit card numbers from
customers who are most likely to have cancelled cards.
Some for example are with high-attrition issuers (the
sub-prime card market, for example). Others are using
cards from issuers who have recently been acquired by larger
companies and will be likely to have their cards replaced.
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NOTE: Before using any of these tactics, discuss them in
detail with your merchant processer or acquirer to ensure
you are fully in compliance with all processing agreements
you have in place.
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