December 30, 2019

87.5% of Customers Renewed License

Rik Schennink @rikschennink

This month, after a year of waiting, I finally got to find out if the subscription model I choose for Doka Image Editor was going to work. The software license I sell is perpetual which means if you cancel your license you can still use the product but you no longer receive new updates and support. This had me slightly worried about the amount of potential cancellations.

I wanted to make sure that customers don't accidentally renew their license and have enough time to cancel if they wish. The Gumroad store I use to sell my software automatically sends a reminder 1 day before the subscription is renewed. In my opinion that's a very short notice. I decided to send a heads-up email 2 weeks in advance. If the customer has any questions or concerns that gives us enough time to address/discuss them.

So this month the first 16 Doka customers had the option to cancel their yearly license and fallback to the perpetual one. The numbers are in and only 2 decided to cancel.

After looking at the cancellation details, one cancelled (no reason) and the other customer was forced to cancel because of financial reasons, he was happy with the product but simply couldn't afford renewing at this time.

I'm actually quite happy with the numbers so far and am very much looking forward to see what January brings.

Happy new year to you all, here's to a fantastic 2020 🥂

  1. 2

    Wow! What a great way to put your customers before profits. It obviously paid off 👏

    1. 1

      Exactly what I was thinking! Fantastic 2020 to you and Doka.js, Rik!

  2. 1

    Congrats! For SaaS you will want to keep increasing those renewal rates, but still very impressive early on!

    1. 1

      Still experimenting with the price point but plan to keep people at the price they started their subscription on, in a sense it’s like an early adopter discount.

  3. 1

    Congrats on the retention! I'm curious: Is your pricing model $x/year for the perpetual license + support/updates, or is it $x/year for the perpetual license + $y/year for ongoing support/updates?

    If a user cancels their subscription, can they start it again at any time and receive all previous updates?

    1. 1

      Not sure I understand the question.

      As long as your subscription is paid for (has been renewed) you get support plus updates. When it expires you no longer get support and updates but are allowed to use the product. When you subscribe again you regain access to all previous and new updates.

      You cannot extend a subscription once it has expired. So buying a new one might mean purchasing at a new price point.

      1. 1

        Thanks, you answered my question! Here's a little context in case you're curious:

        One of my products is fairly high-priced "packaged" software. A customer who purchases the software gets a perpetual license for that version of the software. The user may also choose to purchase annual support and maintenance for approximately $1,000/yr/license, which among other things gives them all software updates (e.g. new feature adds).

        A problem that I'm facing is that customers sometimes want to start an annual support subscription after it has lapsed in order to get the latest version. I'm working to develop a pricing model that allows for this but does not encourage it.

        Happy to create a new post about this if folks are interested - I don't want to hijack this thread. Let me know!

        1. 1

          I’d be interested in that as it’s the reason I don’t offer monthly subscriptions

  4. 1

    Congrats on those numbers! Doka seems like a very cool product! I'm sure one day I'll be one of your users :-)

    To be honest, I don't like at all subscription-based software. I understand if you don't offer tech support after a time, or if I have no access to upgrades. Bug-fixes are a different thing though.

    But locking me in, without knowing what you are going to build (sorry, I'm using a figurative you) and thus not knowing whether I will get any value out of the subscription feels like a scam. You know, I could by Photoshop and wait for 3/4/5 years before upgrading, because the new features didn't add that much value to me. Now, I would have to pay a subscription to use the product.

    1. 2

      Hey! Thanks for your feedback.

      The subscription model offers me a more predictable income which makes it easier to plan future updates / features. As a customer the fact that it is a subscription should give you more confidence in the viability of the product (this is based on customer feedback) which is important if you're going to integrate this is on your own product.

      Note that the license I offer is perpetual, so if you decide to cancel your subscription, you're free to keep using the software for however long you like.

  5. 1

    That's an excellent retention rate, Rik. You're killing it!

  6. 1

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