If you have an annual subscription product, it is possible to win back customers who would probably give up on a purchase due to insufficient funds on their credit cards.
How does it work?
The sales recovery for subscriptions is available for products that have annual payment plans and offer 12 installment payments, via credit card, as a payment method. The goal of the subscription sales recovery is to help you increase your subscription conversion rate and optimize your CAC (customer acquisition cost).
To avoid new subscription sales from being lost, our system automatically creates a monthly payment plan associated with the annual plan. To determine the price, our system considers the price of the annual payment plan and divides it by 12. This division happens because the recovery tool is only available for purchases in 12 installment payments.
For example: if you have an annual plan being sold for $ 1,200.00 and you activate this feature, the recovery service will automatically create a monthly plan, dividing this amount into 12 monthly installments, i.e., a monthly plan of $100.00 will be created for your customer.
And for it to work, at the moment of purchase, it is necessary that your buyer only has the balance to pay for the amount of the 1st installment, and not the total amount of the purchase, since the rest will be charged in the following months (as a recurring charge).
By choosing to activate the Sales Recovery tool for subscription products, you authorize Hotmart to process a payment transaction in a monthly recurring format (until you reach the amount entered in the installment plan). Customers will then pay exactly the same amount per month, according to the number of installments they chose at the time of purchase.
How to set up the tool
The tool can be activated for new and existing plans. You just have to change step 3 below:
- Log in to Hotmart at https://app-vlc.hotmart.com/
- Click on Products and choose the product to activate the recovery
- Within the product’s Pricing menu, click New Plan or, if the plan already exists, click the button in the Actions column, and then click Edit.
- Set the basic information for the new plan: Plan Name and Amount
-
Then, configure how it will be charged. You must use the Brazilian Real as the currency, Annual Periodicity, Installment method (with or without fees for the buyer) and Select 12 installment payments.
Attention: The sales recovery tool for subscriptions is available for all users with products registered in BRL (Brazilian Real), but will soon be available for other currencies. - Activate Subscription Recovery, accept the default payment risk terms and click Save
When you save the new plan, you’ll receive a “recovery tool activated” confirmation and an explanation on how it works.
Important: In the recovery plan, there will be no interest charged, neither for the creator nor for the buyer, even if the creator has chosen to pass on interest rates to customers.
How to track the results of sales made through the Recovery tool?
All recovered sales can be tracked in the sales reports already available on the Hotmart platform.
- Log in to Hotmart at https://app-vlc.hotmart.com/
- On the left side menu, click Sales
- Then, click Overview
- To know if a sale came from the recovery tool, simply identify the ID or name of the monthly recovery plan.
To identify a monthly plan created for the recovery, simply go to your product’s edit page and go to the Pricing page. All of your plans will be listed on this page, and the Annual plan with the activated recovery tool will have the option to expand the row. In the expanded row, a monthly plan will be associated with it, with "rec_" at the beginning of the name.
For example:
Name of the Annual Plan: Annual Sales Plan
Name of the monthly recovery plan: Rec_Annual Sales Plan
It is possible to view information, such as how many payment charges will be made on each purchase, the total amount of the purchase, as well as the amount of each monthly payment, each purchase’s payment collection status, if there are overdue payments, and others.
When exporting the report, new information becomes available, such as the date of the next collection, contact phone number (if the Buyer has informed this at the time of purchase), as well as whether there are any overdue installment payments, and all the installments paid so far. In addition, the results can be exported in XLS and CSV.
Important rules:
- For the Recovery tool to work, the product needs to be an annual subscription
- Allow 12 installment payments
- The recovery tool only works when customers are first subscribing, and they must choose to make the payment in 12 installments
- The reason for not completing the purchase needs to be due to insufficient balance
- The customer cannot change the country and convert the currency. For example, if the purchase was registered in Real and the customer changes it to MXN, the purchase will not be recovered
- In the recovery plan there will be no interest charged, neither from the buyer nor from the creator, even if the creator has chosen to pass on any interest rate to the customers
- The creator will be paid monthly, according to the customer's payment
- The creator, in this case, assumes the risk of possible defaulted payments, since the payment of the recurrences - that haven’t been made yet - may not happen for various reasons.
- It’s not possible to anticipate the commission on installment payment that will be paid.
- The monthly plan is created automatically. Therefore, you cannot make changes to it directly. All rules are a mirror of the main plan, i.e. if you want to change the amount, you’ll need to change the annual plan’s amount.
- It doesn’t work for offers with active free trials
- To disable/activate a recovery plan, simply disable the recovery tool
- It's not possible to switch plans
How does it work in case a recurrence is overdue?
If a recurrence has any overdue payments, the Buyer's access is immediately suspended. Furthermore, it will only be released when 100% of the overdue recurrences are fully paid.
Important: When recovering a subscription sale, there is no guarantee that future payments will be made. To assist you in your default payment management, Hotmart offers other tools to recover overdue recurrences automatically, such as the overdue recurrence recovery tool.
To use it, simply log in to the platform and click on:
- Tools
- Select Recover Your Sales
- Then, click on Overdue Subscription Recovery tool
And, how does it work in the case of a refund?
Buyers are entitled to a refund within the warranty period (which, in this case, refers only to the 1st payment made, counted from the date of approval of the purchase). In other words, the warranty period is not renewed with each paid recurrence. If the buyer requests a refund, the remaining charges will be canceled and, furthermore, will no longer be charged.