Renewal Rate Report

The 'Renewal rate' report contains the same information as the Renewal Revenue report but adds columns that show you the percentage of orders that have been renewed or allowed to expire. Furthermore it can provide a detailed breakdown by effort number that shows you how effective each of the efforts in your renewal series are. These renewal percentages (or "rates") are the key to maintaining the circulation levels of your publication. Small changes in the renewal rate can cause a big change in the circulation of your publication. To see why this is so, let's look at an example taken from one of the QuickFill application notes. (To obtain a copy of the "Renewal Rates" application note contact CWC at one of the telephone numbers or email addresses shown here.

Let's assume that you're doing everything you can to market your publication profitably. You've tried special mailings, telemarketing, trial subscriptions, premiums, and any other methods you can think of to boost circulation. You've found that you can generate just so many new orders a year before your costs become prohibitively high. Here's an example: Say your current circulation totals 10,000 and your renewal rate comes to 70 percent. In that case, 10,000 x 70%, or 7,000, will renew, and 10,000 x 30%, or 3,000, will expire or cancel. That means your circulation—excluding new orders—drops to 7,000.

Now, if the new orders you generate each year total more than the number of subscribers who expire or cancel, your circulation will grow. But if the number of new orders is smaller than the number of expiring or cancelled subscriptions, your circulation will shrink. Only if your new orders remain exactly the same as the number of expires or cancels will your circulation stay the same from year to year. Put another way, the circulation will be stable only if your new orders or N equals C x (1 - R), your circulation times 1 minus the renewal rate.

C x (1 - R) = N

Dividing both sides of this equation by (1 - R) then gives us an expression for C the "steady-state" circulation of the publication-that is, the circulation that will neither grow nor shrink.

C = N / (1-R)

Why should you care about the steady-state circulation? Once you know that number, you can figure out how much your circulation would grow over time if one of the two variables determining it—new orders and renewal rates—increased. In other words, you could tell which, over time, would boost circulation more-obtaining additional new orders or improving the renewal rate. Let's return to our example. Suppose that you are able to generate 4,000 new orders per year and your renewal rate comes to 70 percent. Then, your steady-state circulation would equal:

C = 4,000 / (1 - 0.7) = 13,333

(Remember that 70 percent is 70/100, or 0.7, so 1 - 0.7 = 0.3, and 4,000 divided by 0.3 comes to 13,333.)

Now let's suppose that you come up with a great new promotional gimmick that increases the number of new orders each year from 4,000 to 4,400. In that case your new-steady state circulation would come to:

C = 4,400 / (1 - 0.7) = 14,666

That is, your circulation would increase by 10 percent (14,666/13,333 = 1.099, or 10 percent), if the number of new orders climbs by 10 percent (4,400/4,000 = 1.1, or a 10 percent increase). Not bad, huh?

The following table shows the year-by-year changes when the renewal rates remain the same, but we increase the number of new orders by 10 percent.

	Year 1	Year 2	Year 3	Year 4	Year 5	Long term
Circulation at start	13,333	13,733	14,013	14,209	14,346	14,666
Renewals at 70%	9,333	9,613	9,809	9.946	10,042	10,266
New orders	4,400	4,400	4,400	4,400	4,400	4,400
Circulation at end	13,733	14,013	14,209	14,346	14,442	14,666

As you can see, the circulation doesn't suddenly jump to the new level, but climbs gradually over a period of years. Increasing the number of new orders certainly deserves a big pat on the back. But consider what would happen if your new orders per year remain at 4,000, but you find a way to boost your renewals from 70 percent to 77 percent (that's the same 10 percent increase we just applied to new orders (10 percent of 70 percent equals 7.)

C = 4,000 / (1- 0.77) = 17,391

No, that wasn't a slip of the calculator. A 10 percent increase in renewal rates really does produce, over time, a 30-percent increase in circulation (17391/13.333 = 1.30, or 30 percent). Why? The reason is that when your renewal rates climb, not only do you have more customers renew the first year, but the next year those same customers have yet another chance to renew, and so on in subsequent years. It may take a few years to reach your new steady-state circulation, but it will happen faster than you imagine. The next table shows how our 10 percent increase in renewals affects circulation over time.

	Year 1	Year 2	Year 3	Year 4	Year 5	Long term
Circulation at start	13,333	14,266	14,982	15,536	15,962	17,391
Renewals at 70%	10,266	10,982	11,536	11,962	12,290	13,391
New orders	4,000	4,000	4,000	4,000	4,000	4,000
Circulation at end	14,266	14,982	15,536	15,962	16,290	17,391

Clearly, given a choice between a 10 percent increase in renewals and a 10 percent increase in new orders you'd take the increase in renewals.

If the Renewal Rate report contains everything the Renewal Revenue report does and more then why would you want to run the Renewal Revenue report? The answer lies in the filtering and sorting capabilities of the two reports. The Renewal Revenue report allows you to sort and filter on the attributes of the renewal order whereas the Renewal Rate report does not. So if you are interested in getting the answer to questions such as "how much money did I get from renewals last year, broken down by month", or "how many renewals and how much money have I received in response to that blanket renewal I mailed last month" then you are better off using the Renewal Revenue report. This is because your question involves selecting renewals based on the attributes of the renewal itself.

As soon as an order is entered into QuickFill, it qualifies for inclusion in the 'Renewal rate' report. The order, with some exceptions (listed below), stays in the 'Renewal rate' report under the original expire issue forever. For example, let's say that you entered a new order in January 1997 for a term of 12 and expire issue of December 1997. That order will now be included in this report with the 'Total subs' (1st renewal) group for the 12/97 expire issue. The order will remain in the no action column until it is renewed, canceled, or expired.

Please note, the 'Renewal rate' report counts orders. One subscription is made up of one or more orders and each individual order is included in this report. Therefore, it is possible for a subscription that contains more than one order to be included in the 'Renewal rate' report more than once.
Transactions that affect the inclusion of orders in the 'Renewal rate' report:

If an order is purged, it will not be included in this report.

If an order is canceled "now" before the renewal series has started, it will not be included in this report.

If an order is canceled "now" after the renewal series has started, it will remain in the 'Total subs' column and is moved from the 'No action' column to the 'Canceled' column.

If an order is canceled "at expiration," it remains in the 'Total subs' column and is moved from the 'No action' column to the 'Canceled' column.

If an order is graced, it remains in the 'Total subs' column and the 'No action' column until it expires or is renewed.

The 'Renewal rate' report filter contains three tabs ('General', 'Subscriptions' and 'Prior Orders'). Use the Ctrl-RightArrow and Ctrl-LeftArrow key combinations or your mouse to move from one tab to the other.

General tab:

Primary sort

In this field you choose how you want the report broken down. By default, QuickFill produces a simple breakdown by publication. Other available breakdowns include:

Prior order channel

Choose this option to get a report broken down by the order channel of the order that was renewed. For example, you can get a report that shows the renewal rates for orders you received via direct mail, telephone, or fax.

Prior order source

Choose this option to get a report broken down by the source of the order that was renewed. The source of the prior order might be a tracking code if the prior order was the original order, or it might be a renewal effort code if the prior order was itself a renewal. As a rule, you'll want to break down your report by order source only when you need to analyze renewal rates for orders from quite specific sources. If you have a lot of tracking codes and renewal effort codes then choosing this sorting option will produce a very long report and you will usually want to select a particular subset of your codes on the 'Prior Orders' tab of the filter.

Prior order service

Choose this option to get a report broken down by the term of the prior order.

Prior order term

Choose this option to get a report broken down by the service code of the prior order.

Prior renewal series

Choose this option to get a report broken down by the renewal series that was used to obtain the renewal. This would be useful if you wish to compare the performance of your regular renewal series and a new series that you are testing.

Original channel

This version shows you renewal rates broken down by the channel by which the original subscription was received. Use it to compare the renewal results from different channels used for new subscriptions.

Marketing Plan

Choose this option to get a report broken down by the marketing plan used to obtain the original subscription. Typically, marketing plans are used to identify promotional campaigns or mailings that you make. You might use this sorting option to get a report that shows you the relative renewal performance of the subscriptions you obtained from your various promotions.

List

This is similar to the Marketing Plan option but provides more detail. In any one promotional campaign you may make mailings to several different lists. This version of the report will show you renewal rates of subscriptions obtained by mailings to each of those lists.

Tracking code

This option shows you renewal rates for orders broken down by the subscription's original tracking code. Use this report to analyze renewal rates on new orders from very specific sources. For example, new orders you got from the Business Week mailing list using a pink marketing package and a Swiss Army knife premium. As a rule, you'll want to break down your report by tracking codes only when you need to analyze renewal rates for orders from quite specific sources, and you will select those sources on the 'Subscriptions' tab of the report.

Package

This option shows you renewal revenue broken down by the marketing package associated with the original subscription order. Use it to compare the effectiveness of different marketing packages.

Agency

This option shows you renewal rates broken down by subscription agency. Use it to compare the results from different agencies.

Secondary sort

Here you can choose an optional additional breakdown for your report by either expire issue, or expire month, quarter or year. Since QuickFill allows issue dates to take a wide variety of formats, such as "Winter 2002" or "June/July 2001" it is necessary to associate each issue with a particular date on the calendar. This association is provided by the 'Calendar date' field on the definition screen for Issues. When you define your issue table QuickFill will automatically provide a value for the calendar date field, but you should double check it to make sure that it matches your intention. This is especially important for bimonthly and quarterly publications.

With frequent publications, such as weeklies, it's often a poor idea to get a report on how well each expire issue group renews. That's because you can easily have four expiration dates in a single month. So you'll get data on many relatively small groups, and the information may not be statistically meaningful. The solution is to ask for a secondary sort by expire month or quarter.

Effort analysis by effort sent or by effort responded to

If you request an effort analysis QuickFill will give you the same information as the normal report, but it will also tell you the response you received for each effort in a renewal series. For example, if you sent a series of four renewal notices to a customer, the 'Effort analysis by effort sent' report tells you the response you got to each of the four. (QuickFill shows renewals you received before you mailed any notices under effort number '0'.) The effort analysis is particularly useful for (1) analyzing the effectiveness of each effort in a series and (2) looking at renewal rates for series that you're still mailing.

You may also request an effort analysis by the last effort sent. Therefore, you are able to count responses by either the last effort in a renewal series you sent to a customer or by the effort he or she actually returned to you. (Historically, fulfillment systems report by one or the other of these methods. QuickFill offers both, so you can choose the method you prefer.)

Example: You mailed four renewal notices to John Jones. Jones sent back his second notice, not the fourth. The detailed by last effort sent report records his renewal under effort number 4.

If you choose 'Effort analysis by effort responded to', the report breaks out the renewal rates by the effort number to which a customer responded. That is, this report tells you what percentage of your customers responded with renewal to each effort in a series. So, in our example above, Jones would be recorded under effort number 2.

Subscriptions, Copies

Choose 'Copies' if you have group or bulk subscriptions for large numbers of copies so that you will get a more accurate picture of your renewals. Otherwise, choose 'Subscriptions'. When you select 'Copies', the total column will give you the number of copies that are up for renewal, and the renewals column will show you the number of renewal copies ordered; the sum of the renewed, canceled, expired, and no action columns will probably not add up to exactly 100% of the copies up for renewal—the difference being that subscribers may not always renew for the same number of copies. For example, if you only had one subscriber receiving 1 copy and they renewed for 2 copies the renewal percentage would be 200%. If you only had one subscriber receiving 2 copies and they renewed for 1 copy the renewal percentage would be 50%. In both cases, if you ran the report to count subscriptions instead of copies, the renewal percentage would be 100%.

Exclude unpaid orders from the expiry group

Check this field to exclude unpaid orders from your report. Otherwise, leave this field blank and QuickFill will include unpaid orders in your report.

Include a total of ___ expiry issues beginning ___ before the current issue

In these two fields, you select a range of expiration issues for orders you want included in your report. Say your current issue is Summer 1999. To see renewal rates for three issues before this current issue—that is, Fall 1998, Winter 1998, and Spring 1999—and three issues after the current issue—that is, Fall 1999, Winter 1999, and Spring 2000—enter '7' in the first part of this field and '3' in the second.

Click here for information on the 'Subscriptions' tab or the 'Prior Orders' tab

Click here for more information about Filter screens and Options for running reports.