Recurring products (also known as subscription products) are a great way to maintain a customer and generate recurring revenue. In this article, we'll cover the basics of selling recurring products on ClickBank.
This article contains the following sub-articles. Click the hyperlinked titles to navigate to the section that best suits your needs.
- What are recurring products?
- Frequency Options for Recurring Products
- Recurring Product Commission
- Managing Subscriptions
- Billing Failures
Additional Resources & Related Articles
What are recurring products?
Recurring products are products with an initial price and a recurring price. At the time of purchase, the customer pays the initial price and then pays the recurring price at a specified frequency. The sellers can specify a number of rebill payments, or the subscription can go on in perpetuity until canceled by the customer.
The seller sets both the initial and recurring price, as well as the commission rate for the initial and recurring charge, as well as the frequency at which the recurring charge occurs. Sellers are also able to create trial periods, which allow customers to try out a product for free or for a reduced price until the recurring charge begins. Rebilling frequency options allows sellers to select the frequency of payments for recurring products.
Frequency Options for Recurring Products
Sellers can set the payment frequency for recurring products to one of the followings options:
Specific Number of Days
The customer is billed after a number of days that is specified by the seller.
The customer is billed every week on the same day of the week.
Specific Number of Weeks
The customer is billed after a number of weeks that is specific by the seller.
Every Other Week
The customer is billed every two weeks on the same day of the week.
The customer is billed every month on the same date. If the date does not exist, the rebill date is adjusted to the latest possible day in the month. For example, if a customer signs up for a monthly product on March 31, their next two payments will be on April 30 and May 30.
Specific Number of Months
The customer is billed after a number of months that is specified by the seller. If the date does not exist, the rebill date is adjusted to the latest possible day in the month. For example, if a customer signs up for a product that bills every two months on July 31, their next two payments will be on September 30 and November 30.
The customer is billed every three months on the same date. If the date does not exist, the rebill date is adjusted to the latest possible day in the month. For example, if a customer signs up for a quarterly product on January 31, their next payment will be on April 30.
The customer is billed every six months on the same date. If the date does not exist, the rebill date is adjusted to the latest possible day in the month. For example, if a customer signs up for a semi-annual product on August 31, their next two payments will be on February 28 and August 28.
NOTE: Semi-Annual billing is an admin-controlled feature. Contact ClickBank if you want access to this feature.
Annually – The customer is billed every year on the same date. If the date does not exist, the rebill date is adjusted to the latest possible day in the month. For example, if a customer signs up for an annual product on February 29 of a leap year, their next payment will be on February 28.
NOTE: Annual billing is an admin-controlled feature. Contact ClickBank if you want access to this feature.
Recurring Product Commission
Sellers can set difference commission rates for the initial sale of a product and for the recurring element of that product.
For sales of recurring products facilitated by affiliates, the commission percentage for the recurring product is subtracted from the net sale price.
For most recurring products, ClickBank purchases the product from the seller at a wholesale price equal to 92.5% of retail, less a $1 stocking charge. However, for rebills associated with a recurring product where the rebill is less than $40, ClickBank purchases the rebill product from the seller at a wholesale price equal to 90.1% of retail.
Here is an example of how commissions would be calculated if you offered a 55% commission for a 12-month subscription with an initial payment of $29.95, and monthly rebill payments are $9.95:
Initial Payment: $29.95
55% Commission on Net Sale: [($29.95 x 92.5%) - $1.00)] x 55% = $14.69
Rebill Payments: $9.95/month for 11 months
Net Sale Amount for each rebill payment: $9.95 x 90.1% = $8.96
55% Commission on Net Rebill Payments: $8.96 x 55% = $4.93
Total Earned by Affiliate for this Subscription: $14.69 + ($4.93 x 11) = $68.92
Before each rebill, ClickBank sends a pre-rebill email notification to the customer, reminding them of the upcoming payment. ClickBank also sends an email notification when the rebill is made.
The customer can request a refund on a recurring product. If they request a refund within 60 days of the initial purchase, ClickBank may refund one or more payments based on our discretion. If a customer requests a refund, all future payments are also canceled. After 60 days, all sales are final.
If a customer cancels their subscription to the recurring product, the seller will be notified via an email sent by ClickBank.
In the event that the customer's credit card cannot support the payment request, we will attempt authorization again three days after the first failure date.
After a second failure, we will reattempt four days after the second failure date. After a third failure, we will try once more seven days after the third failure date. A fourth failure will lead to an automatic cancelation of the subscription purchase. We send notifications to the customer on the final two attempts. The following is an example of payment failure timing due to an authorization failure:
- June 1 = 1st attempt, failed due to insufficient funds.
- June 4 = 2nd attempt, failed due to insufficient funds.
- June 8 = 3rd attempt, failed due to insufficient funds. Notification sent to the customer.
- June 15 = 4th attempt. If failed, the rebill is automatically canceled, and a notification is sent to the customer and to you.
Authorization Failure Email Notification
When the third authorization failure occurs, we send an email notification to the customer. The email contains the order details and the following text:
Our records show that the credit card we have on file for the order detailed below is no longer processing correctly. This could be for a variety of reasons.
In order to continue receiving your title subscription your credit card information needs to be updated. Please click the following URL to update your payment information: www.clickbank.com.
We will attempt to rebill you in 7 days. If this billing fails, your order will be canceled.
Card Validation Failure
In the event that customer's credit card becomes invalid, we will deliver the customer up to four notifications requesting new credit card data. The notifications are delivered once a week. If there is no response after the fourth notice, the subscription purchase is automatically canceled. In order to keep the seller informed, we also send them each notification. If updated credit card data is received from the customer, the rebills from that point forward are executed from the date of the successful authorization.
The following is an example of payment failure timing due to a card validation failure.
The subscription terms are:
- $30.00 per payment for 4 months
The Customer signs up on May 1, and is billed as follows:
- May 1 = $30.00
- June 1 = $30.00
- July 1 = Failed attempt to receive payment due to invalid card information, email notification sent to customer
- July 4 = Customer provides updated billing information, and the second 2nd attempt is executed, which is successful for $30.00
- Subscription complete on Aug. 4 with receipt of $30.00 payment
Card Validation Failure Email Notification
When a card validation failure occurs, we send an email notification to the customer. The email contains the order details and the following text:
This email is to inform you that your credit card information needs to be updated to continue receiving your subscription. Please click the following URL to update your payment information: www.clickbank.com
If you have purchased with PayPal please update your billing information within your PayPal account to ensure further service.
Keep in mind, when you create a recurring product, you should verify that all information about your product is correct before submitting it for approval. Recurring products cannot be changed once they are approved. If you make a mistake in the pricing or frequency for a recurring product, you must create a new product to correct the error.
Billing Failure Statuses Provided in Subscription Reporting
Data regarding billing failure is available via Subscription Reporting for sellers. The following statuses are provided:
Request New Card: This status indicates a card validation failure. It's recommended to request a new payment method or card number from the customer.
Payment Irreversibly Denied: This status indicates the subscription was cancelled due to an authentication error from the payment processor with a message to not attempt to retry the payment as its no longer valid. It's recommended to request a new payment method or card number from the customer.
Retry Payment: This status indicates an authorization failure.
Canceled at Processor: This status indicates the customer cancelled the recurring payment from their payment processor.
ClickBank users can view subscription reporting data about their individual sales accounts via the Subscriptions tab which is located under the Reporting tab. The subscriptions reporting section gives you detailed information about subscription products hat you offer. Subscription reporting provides data for both the initial sale and the rebill.
This information allows users to see new customer acquisition (initial sales) separately from continuing subscriber data (rebills). Subscription analytics information is provided on a rolling basis, with 120 days of historical activity available.
Related: Subscription Reporting
Additional Resources & Related Articles
- OFFICIAL GUIDE: ClickBank Seller Launch List
- BLOG POST: 4 Effective Customer Retention Strategies for Sellers
- KNOWLEDGE BASE ARTICLE: How do I offer a free trial of my product?
- KNOWLEDGE BASE ARTICLE: Subscription Reporting