[00:00:00] Matt Cromwell: Hey everybody, I'm Matt.

[00:00:06] Katie Keith: And I'm Katie.

[00:00:08] Matt Cromwell: And this is WP Product Talk and today we are talking about refunds and renewals. This is WP Product Talk, a place where every week we bring you insights, product marketing, business management and growth, customer experience, product development. It's your go to podcast for WordPress product owners, by WordPress product owners.

[00:00:35] And now enjoy the show.

[00:00:46] All righty. Refunds and renewals. Uh, this honestly was, um, kicked off by a tweet from Katie. Katie, um, I'm trying to bring that up right now. I want to share the screen, but can you tell us a little bit about, um, this one subject?

[00:01:06] Katie Keith: Yep. So we, the thing that triggered the discussion was a big mess up on my side at Barn2 where, um, we get Ellipsis to do a big pricing analysis for us a couple of times a year to look at conversion rates and whether to change our prices and profitability.

[00:01:25] And as part of that, they noticed that, uh, That while refunds for new sales had gone up about 22%, which is how much new sales had gone up. So that's normal. You'd expect that the refunds on our renewals were at 73%. And we were like, what, why would there be such a sudden surge in renewal payment refunds? Um, and so I tweeted it saying, has anyone else noticed this?

[00:01:51] Is there a wider industry trend? Turns out, no, it's not. It's just that our email was broken and broke in November, five months ago, and we didn't realize that our pre renewal emails were not going to our customers. So, of course, they were getting their, you have been renewed email and some of them Wanted a refund because they didn't mean to renew so that explained it But it was interesting how much response we got to the tweets and follow up ones and people were really Interested in discussing it as a topic weren't they matt?

[00:02:25] Matt Cromwell: Yeah, absolutely. It was a really interesting subject. Everybody was coming at it from a little bit different perspectives and all speaking to this, um, nuanced customer experience that most of our customers, any of our products, uh, anybody watching now can relate to. Tends to have an auto renewal, annual license type of business, uh, for the most part.

[00:02:46] Um, and so I think the way that everyone was, uh, chiming in is definitely relevant to the conversation. Email deliverability, I feel like came up pretty often.

[00:02:57] Katie Keith: Obvious solution,

[00:02:58] Matt Cromwell: which is a good one, uh, that we should touch on for sure. Um, this one was interesting coming from the other side. I've had things change for me.

[00:03:06] And after a year, I've forgotten about services. I'd set up for renewal. This is more from the customer perspective. It caused me to lose money and struggle more than I needed. We forget sometimes. Yep. Um, I thought that was a good customer perspective. That for sure is where some refunds come from. Um, and, uh, uh, any chance you've tested, see if your emails, there we go again.

[00:03:27] Are they landing in spam? Um, This is a good one from Ron. Companies that build products for WordPress users are now feeling the sting from all the recent Google updates that crushed thousands of sites. Theme builders are out of something similar. Nothing to do with you guys. It's trickle down impact. And truthfully, that's not the truth at the end of the day, right?

[00:03:47] Um,

[00:03:48] Katie Keith: That's not what I'm finding statistically and renewals are up something like 10%, um, overall when you take off all those refunds that we did. Um, and sales are up for us as well. So I don't think it's that bad. And, and we're up actually after the Google updates, although I realize a lot of people aren't, so a lot of analysis is going on to figure.

[00:04:10] what we can all learn from the changes.

[00:04:13] Matt Cromwell: Yeah. I mean, there's a lot of trends. You and I were chatting previously about, uh, the fact that a lot of shops are a bit, uh, down since the COVID, of course, um, during COVID, uh, everyone was trying to do more online than previously, and that gave everybody a boost, but it's, it's been a good few years now.

[00:04:32] We all should be kind of evening out since, since that time and, uh, setting targets based on 2023 numbers and not 2020 or 2021 numbers anymore, but still it, you know, how that impacts renewals is, is an interesting question.

[00:04:48] Katie Keith: Yeah, I think really people were looking because I had asked the question why are our refunds on renewals up people were looking for explanations and actually our renewal refunds are not up.

[00:05:01] It's just that they weren't notified and it was a screw up. So I think that's why people came up with those negatives. They were looking for explanations.

[00:05:09] Matt Cromwell: Absolutely. I mean, we could posit the question, uh, why does it seem like sales in WordPress products are down for everybody? Like, it's like data that the internet made up, like, um, and, and people would be like, Oh, because WordPress is sinking and nobody's using WordPress anymore.

[00:05:26] Or, Oh, because, uh, customers don't want, um, these old, um, settings based plugins anymore. They want like WordPress. Powerful page builders and blah, blah, blah. But none of those things are necessarily true. Uh, it's just the way that the question is worded that makes people dig for, um, problems more or less.

[00:05:44] Um, Uh, we're going a little bit off script on the way that we typically do our product talk. But, but, uh, I think it's a broader subject that I'm hoping that we can dig into a bit more. Um, I will say on the subject of refunds and renewals. Um, let's go ahead and get on script. And what, what would you say from your perspective, Katie?

[00:06:04] Why is this subject in general so important for WordPress product businesses?

[00:06:10] Katie Keith: Well, everybody's seen data that it's cheaper to keep an existing customer than to hire a, to acquire a new customer. And so we need to be hanging on to all of our customers for as long as possible. And renewals, um, well, the first step to that is don't, you don't want them to get a refund after that initial purchase within your original refund window.

[00:06:33] And then subsequently you want them to keep renewing for as long as possible, for as long as they still have a WordPress website with a need for your plugin. You want them to be enjoying your plugin, seeing ongoing value in renewing it. And so there's lots and lots of different strands to that, which we can discuss.

[00:06:51] And of course, after the renewal, you don't want them to ask for a refund. You want them to be pleased that they renewed, um, which I would say means you haven't tricked them into renewing as we accidentally did, but some companies do on purpose and things like that.

[00:07:06] Matt Cromwell: Absolutely. Like I've definitely heard folks say, what if we like, Like rigged the cancel button on our account area where it's hard to cancel and they had to reach out to us.

[00:07:15] I was like, that would be terrible. Uh, it might work. It might work in terms of revenue, but it would definitely not be a customer oriented perspective. Yeah. I agree with you a hundred percent. Like in terms of like the importance of refunds and renewals, what I've seen both, um, with give WP in particular and what I've seen now, um, overseeing the customer experience for all the stellar brands, uh, is that, uh, renewals.

[00:07:40] Tend to, um, be somewhere up where of, uh, of almost 70 percent of all revenue, um, for, for brands, sometimes, uh, depending on how long they've been in the business, of course. Um, but as soon as you have two or three or four years of renewals, it becomes very significant. Now, I have definitely heard folks talk about leaky bucket syndrome as well, which is essentially where your churn rate, the rate at which you're losing, um, those renewals is larger than, um, your new, uh, sales acquisition numbers.

[00:08:15] Um, that means you're not able to fill the bucket as fast as they're going out the other end. So having your renewals be too significant of a revenue driver ends up. Being problematic to, um, uh, the answer to that one should be that, um, you drive more new sales, uh, rather than reduce your renewals. Um, but, um, they renewals end up being a major, a major aspect of a healthy and thriving business.

[00:08:43] Um, in the SAS industry. They're monthly oriented. Um, and so the evaluation of your business is often evaluated based on your M. R. R. for WordPress businesses. It's based mostly on your A. R. R. Uh, your annual recurring revenue. Um, and, um. I'm hoping that more and more WordPress shops are going to talk about the lifetime value of their customers.

[00:09:08] Um, if your price point is less than a hundred bucks and you're expecting, um, three years of renewals, then you can say that that customer has a 300 lifetime value roughly. Um, uh, but if you can increase your renewals, um, then all of a sudden that One customer is worth 400. Um, so those types of, uh, metrics and ways of looking at the business are really significant.

[00:09:33] Um, the other one I really want to talk about today is also refunds and how we manage refunds and deal with the refunds and look at refunds. Um, what's your take Katie on The significance of let's say not just refunds, but like the refund experience. Um, what's uh, what's your take on how important is that

[00:09:52] Katie Keith: across the board or just renewals?

[00:09:56] Matt Cromwell: Refunds across the board. Let's go across the board.

[00:09:59] Katie Keith: Yeah. We've always had a, um, no questions asked 30 day return policy. And actually that's not quite true because we do generally ask a question. Um, if they have, if they provided really. concrete information, and it's very clear that our product doesn't meet their needs, then we will just refund them.

[00:10:19] But if they've just said, I'd like a refund, please, or something, which happens every day, then we do have some set wording about, Oh, yes, you're perfectly happy to give you, I'm happy to give you a refund. But I wonder if I can help you first, would you like to reply with details of the issue? We'd be really pleased to help you out, or give you a refund if we can.

[00:10:43] So we say it's no questions asked, and actually we do ask a question, and I haven't got data on how many refunds we reduce from that, but I hope that we, uh, do. So I think, uh, And some people suggest to me sometimes putting like a refund button in our account area. And I've always pushed back on that because we don't get that relationship with the customer and maybe that's making it a bit too easy.

[00:11:09] Like some of our products particularly are quite complicated in how you use them for different use cases. And so we would really like the opportunity. It's quite likely our product is what they were hoping for, but they haven't quite figured out how to use it for their use case. So.

[00:11:24] Matt Cromwell: Yeah.

[00:11:25] Katie Keith: I like that we can have that personal contact and have one attempt to try and keep them.

[00:11:30] Matt Cromwell: Absolutely. I've said that to my team regularly as, as, um, 30 day refunds, one question asked. That's the way I typically say it. A lot of folks will say no questions asked, but I'm like, yeah, we got one question. Um, and we just want to know if we can help or like, why do you need a refund? Um, and that, I think that's where the big opportunity is, is.

[00:11:50] That, um, every part of the customer journey is important, even when the, the customer journey is coming to an end. Um, we need to be, um, really professional about the way that that happens. Um, and part of being professional about, uh, refunds is understanding why they're happening. Yeah, we're jumping a little bit into story time, but I'll just say that, uh, the, the refund, the importance of refunds in my mind, um, is that there's a ton of insight in refunds.

[00:12:19] Um, I think we can learn a lot about our products if we are really trying to take advantage of the refund experience and make the most out of it as much as possible. Um, I think a lot of folks, uh, in the WordPress space in particular, they do see the, Kind of the 30 day, no questions asked kind of approach.

[00:12:37] If anybody asks for a refund, just issue it and move on because you're not going to win them back. I sympathize with that. You also only have so much time in the day, and often you're a very strapped team or like, maybe you're a solopreneur and you're like, man, I got to go and ship a new thing right now.

[00:12:52] I don't want to be issuing refunds right now. Um, but, um, I kind of say if you want to make sure that you're shipping the right thing, then you should also take, uh, a heed, uh, to, uh, what your refund folks are saying and why they're leaving. So, um, I think refunds are really important is all I'm trying to say.

[00:13:14] Um, let's jump into some examples. Let's jump into storytime. Um, we started off with your storytime in terms of the, this, this tweet and what was going on. Well, I actually wanted to hear if there were other things that you learned along the way and in digging into all of this stuff. If there are other side.

[00:13:35] Um, explorations or anything that you learned about the renewals or the refunds along the way?

[00:13:41] Katie Keith: Well, it was the thing that alerted us to this was part of a wider analysis, um, which included our pricing, like I said, and also things like refund rates. And, um, we re we about probably Two months, two years ago, we discovered that our renewals were going down and it wasn't so much refunds, just renewals generally were going down and we weren't sure why.

[00:14:06] And um, when we did this analysis last week, we discovered that actually that trend stopped last year sometime and we just Haven't done the work to find out that renewals are okay again. And we, when we delved into it more, we discovered that there are time based cohorts in the past, which renew at different rates.

[00:14:26] And basically, and you probably guess where I'm going, the pandemic people are renewing worse. And we had a big increase in sales during the pandemic largely because of restaurants needing to quickly start selling online because they weren't allowed to in person anymore. So we had massive increases in sales.

[00:14:47] And it turns out that a lot of those customers are less likely to renew than all other ones before and since. So our 2020 and 2021 cohorts. Have a less likely to renew and not just after the year one renewal They're less likely to renew after if they renewed at year one They're less likely to continue into year two and so on so those cohorts are bad ones basically and always will be Um, but they're then being replaced by subsequent years, uh who are renewing at the original rate So I think when you look at your data, you can't just say our renewal rate is this Even if you break it down by year, like renewal rates, 50 percent in year one and 30 in year two and 15 in year three, or whatever you've got, you actually need to go even more into that and per product too.

[00:15:37] And another trend we noticed with our renewals was, uh, that, uh, if we had been neglecting a product and not regularly adding new features, then as you might expect, renewal rates are lower. And obviously I'd always suspected this is common sense, but we now have data to show that. So we had a product that didn't have much going on about two years ago and renewals went down.

[00:16:02] And then we added a big Kind of table builder because it was our post table pro plugin where you could generate a table visually without using short codes. And that was quite a big new feature. And then when you all started going up after we added a new feature and we've seen that with some of our other products as well.

[00:16:20] So I think that's the reason to keep developing your product, um, and adding new features. In fact, there's been a couple of interesting conversations on Twitter with Derek Aschauer, who has shared, I think yesterday, he mentioned that one of his longstanding customers for his Sunshine Photocart plugin didn't want to renew because it was such a stable plugin.

[00:16:43] And I said, well, aren't you adding new features? And he said, well, she doesn't want them. But in general, I think, You do need to keep winning them over with new features and you can try and scare them about security, can't you? But I'd rather win them with new features than threaten them that your site's going to get hacked.

[00:17:00] Matt Cromwell: Absolutely. Absolutely. And that just also like shakes their confidence in the whole WordPress ecosystem too, honestly. Uh, this is not the same tweet, but this is uh, related to, this is, this is, uh, Derek, who just responded today to, uh, our post about this episode. Um, I've had a hundred percent success rate with the following regarding refunds on renewals.

[00:17:20] My official policy is no refunds on renewals, but I can refund you 89 of the 99 to cover the payment. That's an interesting approach. Have you ever considered that yourself or, or what's your take on, on his approach here?

[00:17:36] Katie Keith: I must admit, I just accept the loss on the payment gateway fees for refunds and just accept it's part of the cost of doing business.

[00:17:44] Um, I kind of see that, but personally, I don't like to have what I might see as a defensive policy on something like renewals. If it doesn't meet their needs, if they're not using it anymore. Um, if they just were on holiday or whatever, there's lots of reasons why they saw the renewal email and didn't cancel.

[00:18:02] Um, and I don't think it's really fair to keep some of their money when it was a whole year ago that they bought your product. Um, even with the email, I think it's fair enough.

[00:18:12] Matt Cromwell: Yeah, I agree with you. The, the nuances that we have with annual renewals, I think is different than monthly renewals for sure. Um, and like, life is different a year from now.

[00:18:25] Uh, it's a, it's a totally different mentality. Um, yeah, nice. Mark is agreeing with us to kind of take the loss. It's just a cog, the cost of goods sold, essentially, um, goods sold and, and goods refunded, I guess. Um, well, that's awesome. I really appreciate hearing some more insights into your, um, research, um, and, uh, exploration there.

[00:18:47] I think it's, I think it's so healthy and great for folks to be, uh, diligent about figuring those things out. I agree with you a hundred percent in terms of like, um, you'll have customer, uh, segments that, uh, renew at different rates. You'll have, you know, Individual products that renew at different rates, uh, and all that is worth looking into.

[00:19:07] Um, I've recommended a few times to some folks who have like a suite of products, like even on the iconic side, we've talked a few times. Iconic WP is, is a friend of me of barn too. Um, and, uh, we've talked a few times about a couple, uh, of our, uh, WooCommerce extensions that, that don't get a lot of features and don't have great renewals.

[00:19:28] We've thought about like, why don't we just make it a free plugin on. org, um, continue to have it available and useful and we'll continue to support it on, on the. org forums. Um, it would serve a different purpose, um, than, um, than, uh, revenue because it might not be the best tool, um, for renewals and things like that.

[00:19:47] It might not be the best representation of the brand. Um, there's lots of different ways to approach those things. Um, the thing I would love to share about in the, in our personal experience, storytime part is, um, the refund reasons stuff. Um, that's something I've been talking about here and there and post status a little bit on online.

[00:20:09] And I've, I told Katie that, uh, I've got a article that I've been wanting to publish on this for a while. for forever. Um, and so whenever that gets published, I'll, I'll stick this episode in there too. Um, but, um, essentially, um, we have worked pretty hard, uh, this last calendar year, uh, on trying to optimize our refund process as much as possible.

[00:20:31] So we'll have folks request refunds in a lot of different ways. And very often they'll request them in the context of an existing support ticket. Um, and, um, but we have for pretty much all the brands, we have a dedicated account services team and a customer success team as well. And the account services team is going to issue those refunds for the most part.

[00:20:53] Um, but the customer success team, they're monitoring the refunds, um, for insights because part of their whole objective and goal, uh, is to learn about the product from the customer and to elevate, um, the feedback to the product team. So that, uh, product roadmaps can be informed by customer feedback as much as possible.

[00:21:14] Uh, so there's this real strong handshake between, uh, technical support that gets the refund request and account services. That's going to issue the refund and customer success. That's going to process the insights in the refund, uh, to elevate it to the product. Product team. That sounds complicated. Um, or, or maybe too many moving parts.

[00:21:34] Um, but, um, on the, the bottom line is basically just having a workflow in which you ask that one question and that you have a way in which you log that feedback. Um, and, and I would say a way in which you process, uh, that log of feedback. Um, so what we do is when somebody says, Hey, I really need a refund on this.

[00:21:56] Uh, we say, no problem. And we put, and we send them to a form on our website that says, this is where you request your refund. Um, and yes, it's a little bit of a manual effort, but in that form, it asks them, why do you need this refund? And we give them the ability to choose from a list and to add comments as well.

[00:22:15] And nine times out of ten, um, they're providing us really actionable information just by filling out that form. And we don't have to ask that, that one question. Uh, but if somehow or another they get to, um, account services, um, without going through the form, um, then we do ask that follow up question when they request the refund.

[00:22:36] And just like you, Katie, um, It's really important that we say on the outset, absolutely, we can issue the issue you that refund. No problem. Can I first ask? Um, what is the cause of this refund request? Or what brought you to this point? Or is there any way that we can help you at all? Um, we want them to know right out of the gate that we're not asking the question in order to prevent the refund.

[00:23:01] Um, the refund is always. In, um, uh, the realm of possibility, um, but it would help us a ton if we understood, uh, what was going on. Um, the form though itself being really diligent about getting them to go through the form, um, and, and, and say what the purpose of the refund is, and to even highlight, like, you know, what support really screwed up and this happened on the support side, like, that's really important feedback for us.

[00:23:26] Uh, or I really needed to do this product and now it's not working and blah, blah, blah. Or sometimes the ones that I like the least are when they said I have to shut down my business and I'm going out of business. I have to shut my website down. And that happens a lot more often than you think. Um, and it's, it's no fun.

[00:23:46] Or they say, we're leaving WordPress. WordPress is too complicated and too busy and too many security issues. And we're just going to start using Squarespace or whatever. And that sucks too. Um, so whatever the reason might be, we try to get those and we log them over time and we process how they're being used.

[00:24:05] Uh, what kind of insights we get, a lot of the things that you'll see give WP building right now, like you'll see us making a lot of noise about event fundraising on give WP. That's because we had a lot of refund requests of people saying we're trying to run events and do donations and we can't do it as effectively as we'd like with give.

[00:24:22] So we lost customers because we didn't have that feature set. Um, and so now we're working on it and, um, that's gonna hopefully ideally prevent those renewals from being refunded. Um, Yeah, uh, that's been really, really excellent work. Um, and I was telling Katie beforehand that we have all these targets internally at Stellar, where we're tracking against new sales targets monthly and renewal targets monthly, um, and refund rates monthly.

[00:24:51] And since we've implemented really strong email reminders, um, across all the brands, uh, and are, we really, We just beat up the wording of those email reminders really carefully about the renewals. Um, and also an email that gets triggered when they cancel their subscription. We really worked on that one really hard as well.

[00:25:09] Um, And as soon as we started really implementing, uh, the feedback, uh, form for all the, the The refund reasons. Um, we've seen a lot of improvement, a lot more insight, and we've been able to reduce a lot of refunds as well. And so we're exceeding our targets on our refunds across all the stellar brands right now.

[00:25:30] Um, which, uh, which has made me super happy.

[00:25:34] Katie Keith: So when somebody fills in a reason on the refund form, which you can help with and like they think the product doesn't do something when it does, what do you do? Because that's less of a conversation than a support ticket.

[00:25:48] Matt Cromwell: Yep. If they're giving us actionable insights, um, in that form, in that submission, we just issued the refund immediately.

[00:25:55] They've given us what we need. Um, we were like, okay, we hear you. Here's your refund. It's going to be in your account in three to five days. Um, and that Why?

[00:26:05] Katie Keith: If you're trying to reduce refunds?

[00:26:07] Matt Cromwell: Um, if they say, well, the, the part where we try to reduce refund, honestly, I'm not like our intention isn't necessarily to reduce refunds.

[00:26:16] It's not like that. We're actively trying to stop it. Um, we do try to stop it when in the context of a support ticket, they're, they're in the, they're getting support one way or another. And they're like, sometimes they come in hot and they're like, if this doesn't get fixed right away, I'm going to get a refund.

[00:26:31] Um, our support agents will say, we absolutely can issue that refund. Okay. But we also absolutely can fix this problem for you. And so we work first on fixing the problem. So we are proactive about it in the context. Um, but as soon as they have essentially said, no, I need a refund. We're not, we're not sending them to that form until it's like, no, they're, they're gonna, they're gonna get a refund.

[00:26:55] Uh, anything, any preventative things we do is before we send them to the form. Yeah. Does that make sense?

[00:27:02] Katie Keith: It does. Yeah. I still feel it's like a friction point for the customer. Cause they've already told you what the problem was and you're making them fill in a form.

[00:27:10] Matt Cromwell: So,

[00:27:10] Katie Keith: I don't know, I feel they would get annoyed at a time you'd want them to be a bit less annoyed.

[00:27:15] Matt Cromwell: I honestly have not had one single person express annoyance at filling out the form. It's not a long, tedious form. Um, it's name and email address and, um, and, uh, and why do you need this refund? Uh, optional comments. Um, and, um. And that's it, and they get responded back to, um, same day, every single time. Um, so we, we have not got negative feedback about the refund form at all.

[00:27:40] And I was concerned about that too, but I, I really felt like the reasons the, and it's not only just the reasons it's like the. Consistent every single refund needs to have a refund reason attached to it in one way or another because you can't just say well We kind of think that we need event fundraising, uh, because we get some refunds because of that No, we need to have it in terms of like no we've we're asking every single person And we know that like 15 percent of the refunds on give renewals are because we're missing this feature, like being able to say it with authority, uh, is a really big deal.

[00:28:16] Um, you know, everyone wants to be able to influence the product roadmap in one way or another. Um, and, um, if CX can do that, uh, with, um, with data, then, uh, it just is more compelling.

[00:28:28] Katie Keith: Yeah, and Mark likes that concept. He says, I feel like the form is a nice way for them to fully consent to the refund.

[00:28:36] Matt Cromwell: They know

[00:28:37] Katie Keith: it's going to happen.

[00:28:38] Matt Cromwell: Yeah.

[00:28:39] Katie Keith: So Matt, have you measured a decrease in renewals as a result of the form?

[00:28:46] Matt Cromwell: I don't think there is a decrease in renewals. I don't see the form being super connected to renewals, uh, necessarily. Sorry. I should have said

[00:28:54] Katie Keith: refunds. I just said the wrong word. Sorry.

[00:28:57] Matt Cromwell: Oh, by adding an extra

[00:28:58] Katie Keith: step, some of them not bothering.

[00:29:01] Matt Cromwell: That's a good question. I don't know if I have seen. Any data on like, we sent them to the form and they didn't fill it out. That's a good question, actually. Um, I have a feeling that that, that percentage of people is not particularly high. Um, cause like I said, we tend to not send them to the form until it's really clear that they are like, no, I need a refund.

[00:29:23] Um, I, but I do, we do definitely talk regularly about how our account services team and technical support teams. are helping to reduce refunds as much as possible. I will say that across Stellar as a whole, we're aiming at 7 percent of revenue refunds or less. And right now, every single brand is less than 7%.

[00:29:47] And that's been super exciting for us. Because in the past, It wasn't across all the brands. It wasn't always that case. So I feel like that's a healthy, um, a healthy refund rate to be working against.

[00:30:02] Katie Keith: Yeah. I'm pretty sure ours is higher than that, particularly for our newer products. Cause they always, new products often have higher refund rates and then it goes down after a while.

[00:30:11] Do you've added more features, ironed out bug. So I'm sure ours is significantly higher than what you're equating.

[00:30:17] Matt Cromwell: Actually, no, that's a good point. We have some newer products that are tucked into some of the bigger brands. We have like Member Dash, for example, is on the LearnDash brand. Um, LearnDash as a whole is exceeding that target, but I think MemberDash is a little bit higher by itself, um, newer product.

[00:30:33] Um, so yeah, that makes sense. Makes sense.

[00:30:36] Katie Keith: So we've got a couple more comments on the idea of a refund form, a follow up from Mark suggesting to add a disclaimer, like you will no longer receive updates, et cetera. So that makes it really clear on that refund form, the consequences of the refund also, um, well with our particular licensing system, if you get a refund, it breaks the plugin because effectively you've never paid for it.

[00:31:01] Uh, if you get a renewal refund, it doesn't break the plugin. But if you. Initial purchase and then get a refund. You've never paid us a penny effectively. So we remove functionality. So it is important that they know the consequences of what they're asking. So I think Mark's suggestion is good. And

[00:31:20] Matt Cromwell: a clarifying question.

[00:31:21] Is that a SAS functionality that is disabled? Or is that like the plugin?

[00:31:27] Katie Keith: Yeah. So, you know, like when you buy the plugin, you might have to enter your license key in order to, for it to work on the front end and similarly, that's what we're revoking after that refund for the initial purchase.

[00:31:40] Matt Cromwell: I don't think that's super common in WordPress.

[00:31:42] Have you, have you got. Pushback from that much?

[00:31:45] Katie Keith: Not really. I think like Freemius does it, it's not default in EDD and we had to customize it in order to do that. Um, but I think it's really important because otherwise people can just trick you and ask for a refund and keep using it. Yeah. Um, even beyond your renewal date, they can use it forever if it keeps working.

[00:32:05] So I think if they've never paid, it's fair enough and it fits within GPL and all of that.

[00:32:10] Matt Cromwell: It does. It does for sure. And it's not particularly what many folks would say is the WordPress way. Um, folks often are like it's open source code and they can do whatever they want with it. And, um, yeah. Um, but and they can

[00:32:25] Katie Keith: remove that code, which will disable the functionality after the refund as well.

[00:32:29] And that's fine.

[00:32:30] Matt Cromwell: Our customer success team, when they see a refund request and it's like, I don't use it anymore. They go and they check the website and it's like, you are still using it.

[00:32:39] Katie Keith: Interesting.

[00:32:40] Matt Cromwell: What's the real reason here? Nice. What does Zach say in here?

[00:32:46] Katie Keith: So Zach says we have a secondary form as well.

[00:32:49] We have a no questions asked refund policy. So we have an input field where feedback can be given, but it's not required. So that's a difference with Stellar. And then we have a follow up email. That's the additional step, but it's after the refund. So it was no questions asked.

[00:33:07] Matt Cromwell: It's a follow up question. I have to assume and Zach can correct me later, but I have to assume he gets far fewer refund reasons, uh, Far fewer refund reason insights with that method.

[00:33:20] Um, I, I, and I, cause I did think about that, but like sending a follow up email after a refund for one, I just think the customer's already like They don't care. They're not going to open that email. Um, you're asking them to do additional effort after they're already appeased. Basically. Um, like I really think in the context of, yeah, poor sack, I'm telling you, Zach, just let me know and I'll help you out with that, uh, refund process.

[00:33:47] So, um, I think asking them in the context of the refund, it's like, yeah, you want your money back? We can do that. No problem. Do me this one favor right now. Um, I think that just changes it. It's understandable. Like they, they, they, they know that we're a business. They know that we need to run, uh, and operate.

[00:34:06] So, um, I think it's not an unreasonable request.

[00:34:11] Katie Keith: And people do come back. So you do need to keep them on side. Like they might try your competitors and end up back with your product because they realized that the competitors don't do the job either, that they were looking. And also, um, agencies, particularly, they might have had a refund because it wasn't what one particular client needed, but then they remember you and they come back if you have multiple products, of course, or the same one for other things.

[00:34:35] Clients in the future. So you can't assume, Oh, we've lost them. It doesn't matter. They are still customers that you need to look after. And even you don't want bad reviews, of course.

[00:34:46] Matt Cromwell: Yeah, exactly. Like, uh, you know, refunds can be used as leverage for negativity for sure. Um, Some of the best insights I think you get from refund reasons is, is, um, on your competitors, honestly.

[00:35:02] Um, finding out more about why people choose your competitors instead of you. If they're going to go to the effort to get a refund from you and take your plugin off of their website and install somebody else's stuff, like that competitor has got something going on. That's really interesting. Um, I'll say like three years ago or so.

[00:35:21] We started getting some refunds on the give side, uh, for a product we had never heard of called give butter. Um, and, uh, give butter just yesterday announced that they just got a 50 million investment. Um, so the, they are now a really big, serious competitor, um, that we had only just started hearing about a couple of years ago.

[00:35:43] Um, and it was because of our refund reasons. They got on our radar already a while back. Um, but they're, they're a huge product now. Um, And why folks choose them is, was really interesting to us. We started paying a lot closer attention to who they are and what they're doing and trying to make sure we have as much parity with their feature set as, as we possibly can.

[00:36:04] Um, and then of course, like really trying to highlight our open source advantages against a SaaS platform like they are, um, and the customization abilities you have when you own your own code, uh, compared to cookie cutter options that you have with SaaS platforms. Um, so, um, the, the refund reasons there changed the game a lot, so, yeah.

[00:36:29] Nice. Well, we are close to our time. So how about we move into best advice? Um, or do we have any more comments or anything? Let me see.

[00:36:39] Katie Keith: Yeah. We've got a comment from Zach. Um, yeah, fast, low hassle refunds are an investment in your brand. So that's agreeing with what we were saying.

[00:36:50] Matt Cromwell: They are. Um, nice. I love, uh, lots of comments today.

[00:36:56] It's awesome. Um, all right. Best advice. So Katie, I think you're up first. What is your best advice for anybody who is trying to tackle their refunds and renewals?

[00:37:08] Katie Keith: Um, on the refund front, I would say treat refund funds as an opportunity to retain the customer, but only where that's realistic. Don't keep pushing, except when it's over, and make that easy, um, so that the customer gets what they're entitled to, the refund, and also is more likely to come back to you in the future.

[00:37:28] And on the renewal side, I'd say look at every stage of the customer journey. We haven't. This could easily be a whole separate episode, which we should do actually, but things like all the emails that they received to, so through the year to feel they've got an ongoing relationship with your brand added value, what value can you add at different stages so that when it's renewal time, they really think, Oh, I want to be part of the, um, Bond to club or whatever and keep renewing.

[00:37:58] 'cause they feel like they're part of something. That could be so many different things, but think about it from start to finish so that they're more likely to renew because they genuinely want to

[00:38:09] Matt Cromwell: absolutely love it. Um, I will say on the refund part. Focus on those reasons right away, even when you're small and just starting out and you start getting refund reasons.

[00:38:20] Folks are telling you what is wrong with your product. Folks are telling you why they choose somebody else. Log it, pay attention to it, circle back when you're developing your next roadmap, make sure that you're addressing that feedback immediately. Um, it's gold. Um, refund reasons are gold. Um, on the renewal front, I always say renewal starts the day after first purchase.

[00:38:45] Um, really focus on getting folks to get onboarded onto your product right away. I love, uh, if you've ever, if you haven't, uh, uh, checked out Groundhog, Groundhog from Adrian Tobey. It's a really cool product. He has a really powerful onboarding sequence. When you purchase Groundhog for the first time, um, it's, it's really well done.

[00:39:06] It's powered by his own product. Cause it's a, it's a CRM. Um, and, uh, He really makes sure that, um, in that process that you are adopting the plugin, uh, correctly and getting it set up and starting to have success. Um, trying to really focus on, uh, making the product sticky as much as possible to the customer from day one is how you ensure that they're still going to be using it at day 366.

[00:39:34] Um, so, uh, start at the, uh, right away with onboarding, um, and that will help your renewals a ton. And then, um, Pay attention to everything Katie says about renewals too, because all that data is super important and paying attention to, you don't want to set unrealistic expectations, um, like even within Stellar, um, nobody can compete with, uh, the iThemes, uh, solid WP renewal numbers.

[00:39:58] They've had customers for like 13 years now. Um, and it's just, uh, the stickiest product ever. Like nobody wants to, to stop renewing on their security product, you know? Um, so. You can't really compare yourself to them, but find out what's realistic for you and, um, set good targets, um, and pay attention to all those customer touch points.

[00:40:22] Well, this was a great conversation. Thanks so much, Katie. I appreciate it.

[00:40:25] Katie Keith: Yeah. Thanks.

[00:40:26] Matt Cromwell: And, um, I think you're hosting next week too, right? What's going on next week?

[00:40:30] Katie Keith: Ooh, we haven't got show notes for today, so I can't remember. Um, oh yes, it's, um, Ronnie Burt, um, the head of Gravatar. And we'll be talking with our co host.

[00:40:41] Amber about how to bring your product beyond WordPress. The Gravatar is, um, far bigger than that. Uh, so I think that'll be really interesting reaching new markets and everything.

[00:40:54] Matt Cromwell: I love it. That's awesome. Gravatar has gone over an interesting phase recently. So that's awesome. Well, thanks so much, everybody.

[00:41:02] Um, hit the like button, hit the subscribe button, have a good week and we will see you next time. Thanks so much.