CBA: Automatic Renewals, that's Right!

Automatic Renewals, That's Right!

By Carl Bloom

Here is breakthrough creative that brings a big lift in retention and revenue.

An automatic renewal promotion was tested twice this year in renewals for KQED, San Francisco’s public TV station. It was tested in the first notice against a high-performing control package with a temporary membership card and Johnson Box (reserved for special personalized messages to boost renewals or upgrade gifts or deliver a special preview announcements for upcoming special TV shows).

The test package carried the same temporary membership card and Johnson Box. However, in the test letter copy we informed members that we took the liberty of automatically renewing their membership, subject to their confirmation. It was clear that members were under no obligation to renew. The key words are continuation, confirmation and contribution.

The first test was conducted in January 2003, with a follow-up confirmation test in February 2003. Results to the second test were practically a mirror image of the first test – just slightly better.

The Results: The Automatic Renewal packages increased response by an average of 30% for multi-year members (members who have already renewed one or more times) and 27% for first year members (one for their first renewal). Increasing first year conversion is a very hard thing to do but; it’s a major objective of all direct marketers. Keeping hard-won, expensively acquired new customers, contributors or subscribers is pivotal to increase the customer base and long term revenue flow.

The more members you keep the more the revenue grows.

When we combined the two tests, 20,000 total names were split into a test and a control of 10,000 pieces each. The test panel of 10,421, with a 31% response produced $33,000 more than the control panel. That’s $3,374 more dollars for every 1,000 test names mailed. If you apply these results to your file size, how much more income would you produce and how many more donors or subscribers would you keep in a year? The increase can be huge!

If you would like to discuss your renewal needs and how this Automatic Renewal program could lift your retention performance, email or call CBA for a review of the winning KQED package and a no-obligation critique of your renewal program.

This Automatic Renewal approach is being expanded into a full six-effort series, including a telemarketing call based on the “automatic” copy concept.

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