Thriving Memberships

Guest blog post by Braden Drake Esq., LLM, owner at Not Avg Law firm

Remember that episode of Friends where Ross and Chandler try to cancel their gym memberships? After many failed attempts, they decide to close their bank accounts instead. Then, the bank has them jump through hoops to close their accounts. 

We've all been there.

From meal kits to streaming services, it can be a nightmare. But you could be doing the same thing to your subscribers without even realizing it.  

And Dama asked me to come here and talk to you about it. Braden here, Dama's bestie for legal, bookkeeping, and tax issues. The FTC is now cracking down on recurring payments. I read through the legalese so you don't have to. Let’s make sure your offers are compliant. 

The Federal Trade Commission issued a final “click-to-cancel” rule. It's a big deal.

The FTC are the federal girlies in charge of making sure businesses are being fair to customers. Most of the time, they only talk to the troublemakers. But sometimes there’s so many troublemakers they add a new rule to the books and we all have to check ourselves. That's what just happened with this “click-to-cancel” rule, also known as the Negative Option rule. 

The FTC is giving us 60 days after they publish the rule on some parts and 180 days after they publish on other stuff. But, the sooner you get yourself together legally, the better. The FTC enforces their rules through the courts and you could get fined or have your business activities restricted if you don't comply. 

In short, these rules will apply to any type of recurring payments. The core takeaway is to make sure any offers with recurring payment are easy to cancel, and that the payment terms are crystal clear to the buyer.

Examples of recurring payments include standard month-to-month memberships and quarterly or annual memberships. Many SaaS companies do those free trials. You must include your card details when signing up for the free trial and then they auto-charge you one month later if you don’t cancel.

EXAMPLE: Britney has an online offer where she gives her take on the latest music trends. After a three month free trial, her subscribers' credit cards get charged $40 every month. Toxic? Maybe. Let's talk about what Britney could've done differently, cause the FTC will not take “Oops! I did it again” as an excuse. 

Here are 5 easy steps to make sure your auto-renewing or subscription format offer is totally kosher with the FTC. 

Each step is taken directly from the published rules, linked here. 

1. Make it as easy to cancel as it is to consent to (join). If they signed up online, they can cancel online. Don't hide the fire exit here. We want a clear and conspicuous one click cancellation. (16 CFR 425.5)

2. Charge nothing to consumers asking to cancel their subscription. Don't charge a cancellation fee on a subscription or ongoing membership. (16 CFR 425.5)

3. Add a dedicated checkbox to your checkout process informing the consumer about the subscription. You need express affirmative consent separate from any other portion of the transaction. (16 CFR 425.6)
   Sidebar from Thrivecart Template Shop: you can absolutely add a mandatory checkbox with terms and conditions and also have a custom disclaimer – just add that to your checkout in Thrivecart. Need help setting up + customizing checkouts in Thrivecart? Grab CartStart and get it DONE.

4. Make it impossible to complete the transaction without getting consent. Technically, you can just get consent without structurally requiring it, but you'll have to keep the records of consumers' consents for three years. (16 CFR 425.6)

5. Disclose all of the following information before obtaining any billing information from the consumer. (16 CFR 425.4)

• The consumer will be charged for good or service or that the charges will increase after any applicable trial period ends, 
• The charges will be on a recurring basis unless the consumer takes steps to prevent or stop such charges
• Each deadline (by date or frequency) by which the consumer must act to prevent or stop the charges
• The amount or range of costs the consumer will be charged, if applicable, that the charges will be on a recurring bases, unless the consumer timely takes steps to prevent or stop such charges, AND
• The information necessary for the consumer to find the simple cancellation mechanism

EXAMPLE: 

⚠️ You are signing up for an automatically renewing subscription. Your preferred payment method will be billed for $— on the –th of every month until you cancel by clicking the “Cancel My Subscription” button inside the Account information of your Client Portal. 

I understand and agree

Best practices for handling cancellations as membership owners

Send a stand alone notice before renewal* that gives the customer instructions and time to cancel. We’d even recommend a few notices for annual renewal. Something like notices two months out, one month out, and one week out.

Make sure your cancellation process is easy to find and complete. For this, you need to check how it works with your payment process. Consider adding a “how to” or a hyperlink in a location your buyer might regularly check like their members area or monthly automated invoice emails.

Lastly, and most self-servingly, we recommend getting some legal experts on your side. It’s kind of meta, but we have our own recurring subscription. It’s a newsletter for $10 per month where we send out notices of legal updates like this one. You can check it out here.

How to handle cancellations for memberships hosted in Thrivecart

Hey there – Dama here, the founder of Thrivecart Template Shop. I wanted to chime in on Braden’s fabulous blog post with some Thrivecart-specific details, especially as pertains to the best practices section located above.

Thrivecart membership best practices for FTC compliance

1. Thrivecart Pro has advanced dunning features, but if you have Thrivecart regular, you can either send reminder notifications before their next rebill (recurring charge) via your email service provider or via your payment processor. We use Stripe for all payment plans and have a detailed tutorial on how to configure those notifications (and brand them so your customers can tell they’re legit notifications) inside our training, Thriving Memberships.
   
2. I recommend making your ‘cancel membership’ link as easy to find as possible inside your member area. This is super easy to do if you host your membership in Thrivecart Learn by adding a lesson strictly dedicated to cancelling, and/or linking to the cancellation in the footer of every lesson or on the main course dashboard. Need course design tips for Thrivecart Learn? I cover that in detail in both of these trainings: Thriving Memberships and Learn Beautifully. Thrivecart has a customer center where customers can access copies of invoices / purchases made from you and also manage (and cancel) their membership.
   
3. I wholeheartedly agree with Braden that it’s best to make sure you have your agreements, website terms, and documentation in order – for that, I have (and love) The Contract Club, a one-time purchase that has dozens of legal templates you can use, and also getting legal support on retainer. Specifically, Not Avg Law is my legal team on retainer and they help me interpret FTC rulings, make sure my website and product terms are compliant and water-tight, and also help me deal with copycats and thieves head-on. I highly recommend them – check that out here.

Other posts you may want to check out:

• Is Your Subscription Membership About To Violate Federal Law?
• Recurring Revenue Businesses: The Pros and Cons of This Business Model
• Website Engagement: Interactive Elements You Can Add to Your ConvertBox
• The Top 5 Mistakes to Avoid When Creating Upsell Offers
• Best Alternatives to Zoom for Course Creators

Loyalty is the cornerstone of a successful membership organization. While it might seem like an obvious pillar, many programs fail to effectively retain members. In fact, the majority of loyalty studies point to member retention as the most important success metric for any membership program.

In order to keep members happy and loyal, it’s essential to have a solid retention strategy in place from the get-go. You see, not everyone will stay once they’ve joined your community. This means you need to create an effective plan right away that will keep your new members around for good. 

In this article, we’ll explore different strategies for retaining members — both current and new — so that you can build lifelong customer relationships instead of just one-time guests.

Creating a Membership With ThriveCart and ThriveCart Learn

Before we dig into member retention strategies, did you know that you can create and host a membership on ThriveCart?

It’s true!

You can create a membership product with a recurring subscription payment option and host the membership portal in ThriveCart Learn, like you would a course or digital product.

Looking for a Thrivecart sales page template for your Membership? Shop our full-funnel templates for Thrivecart here.

One Important Challenge for Memberships with ThriveCart:

Right now, ThriveCart doesn’t have the capability to see when the member’s last payment came out for cancellations. 

For example: If a member signs up for an annual membership in July and cancels in December, they should keep access until the following July, right? But, ThriveCart immediately removes their access to the Learn product when their membership is canceled.

It’s an important quirk to keep in mind, but it can easily be resolved by using Zapier or Slack notifications to manually review annual cancellations.

One membership host I asked has this process when a member cancels:

– They receive an automatic cancellation notice in a Slack channel

– Their VA (virtual assistant) reviews the cancellation dates and adds their access back to the membership in Learn

– Next, the VA creates a task in ClickUp (their project management system of choice) with a due date of the actual date their membership access would expire

– When that due date rolls around, the VA manually removes their access and finalizes the membership cancellation

It’s not a perfect system at the moment, but it works to avoid membership complaints and issues with members not having access to things they should.

Why Is Member Retention Important?

Member retention is necessary because it keeps members engaged. Retaining members not only ensures that the community will be successful in the long term but also prevents members from leaving for competitors.

As a member of a group, you’re more likely to stay if other members are satisfied with the program. 

For example, if you’ve been involved in a fitness group for six months. In that case, you’re less likely to leave than someone who was just introduced to the program and had no connection with previous members. 

Membership owners should focus on retention as they want to ensure their community is sustainable in the long term and avoids costly membership churn rate spikes.

Member Retention Strategies

1. Personal and Professional Development Strategies

Members can make the best use of their membership by focusing on personal and professional development. The truth is many people leave because they lose touch with memberships after a while. This happens when members stop using their programs to improve themselves and just join for social reasons. But if you focus on personal and professional development, your members will stay engaged throughout their relationship with your program.

One fun way to do this and encourage engagement is by running live events, networking events, or live challenges.

2. Fix Your Onboarding Experience

One of the best ways to create a more ethical and engaging membership program is by focusing on the onboarding experience. If a new member has a wonderful experience right from the start, it makes a great first impression. 

A great first experience will make them want to stick around.

Review and improve your welcome videos, your welcome email sequence, and everything else that a new member first experiences.

3. Offer Discounts and Other Negotiating Tools

One way to keep members loyal is to offer them discounts and other negotiating tools. You could easily add in a couple of emails that someone receives at the 50-day mark as a monthly member to upgrade to annual.

Why the 50-day mark? Because we don’t want to offer them this when they just had a monthly payment come out, but we also want to give them some time to think it over.

Another way to keep members around is by offering membership benefits that they can’t find anywhere else. People love exciting additions and exclusive offers! A benefit like this helps retain members for years.

4. Always Get Feedback From Your Members

One of the best ways to keep members engaged and loyal is to ask them what they want. Send market research surveys, let them vote on content – this allows them to feel heard and supported. This strategy will establish you as an accessible resource and make it easier for people to feel connected with your membership. 

By engaging in these types of practices, members are more likely to feel like valued customers who know how much you value them.

Conclusion

Member retention strategies are valuable for any business. By implementing these strategies, you can improve the quality of your membership experience and grow your membership!

Other posts you may want to check out:

• Is Your Subscription Membership About To Violate Federal Law?
• Recurring Revenue Businesses: The Pros and Cons of This Business Model
• Website Engagement: Interactive Elements You Can Add to Your ConvertBox
• The Top 5 Mistakes to Avoid When Creating Upsell Offers
• Best Alternatives to Zoom for Course Creators