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Editor's Notes

• #4: Does anyone know Avast? Don‘t forget: We not the entity which sell our products. We use eCommerce partners to do so. We are operating globally and to sell globally we would need to have legal entities in those countries – we would need to know local law and accounting. And that would be very resource demaning. That‘s why we use those ecommerce partners – we have few local partner and one global – Digital River. In Avast eCommerce does majority of company sales. We sell almost entirely online and most of the sales happen in the program – not at the website. Therefore we have quite large eCommerce team: we have more than 15 CRO FTEs..
• #5: Those 15+ FTE focusing on CRO work on both big and small optimization projects. Among the BIG ones certainly belong these: In product checkout (the shopping experience is within the program – better for conversion rate and ux experience) Local currencies and payment methods (Brazil – Boleto, installments, Germany – Direct Debit etc. – a constant project) Auto-renewal (recurring payments, subscription model..)
• #7: Subscription model with auto-renewal is becoming a standard business model: - Spotify, Apple Music, Adobe products, Office, Apps like Evernote, Wunderlist, Honest.. More and more companies are switching to subscription model and Avast is among these companies. Why?
• #8: It is beneficial for both the companies and the customers. Companies: Higher renewal/retention rate – renewal rate means how many customers stay with you for the next period (typically another year) It also means more loyal customers And in the end more $ Companies like Adobe, Microsoft also did the the math and find out that they can get more customers by lower initial costs and keep sustainable revenue streams by monthly or yearly fees. Customers Despite some people don‘t like it in general – becuase sometimes auto-renewal has sometimes bad reputation, it perceived as a bit a shady there are also benefits for the customers: It is more convenient, you dont need to carry about expirations, you always have up-to-date version etc. There are usually lower initial costs (example of Adobe, MS) And there is no „pain of payment“ – it hurts a bit everytime we need to pay (take out our wallet or credit card..) but with AR it seems that there is none of it. Just seems of course 
• #9: And this Avast real data example. We introduced AR first in US in October 2012 and in October 2013 we could see how it changes the renewal rate (=first customers with AR have expired). And there is the real data – plus 43%! It becomes a big success and we started preparing AR for other countries as well. We have expanded it many major markets and in all of them we can see a similar increase in renewal rate. AR then becomes one the major drivers of 2014 record sales year. It took our business to the next level (with the other 2 big optimization projects) and it contributed to the 1 billion $ evaluation by our investors.
• #10: However AR has some limitations and specifics. So let‘s have a closer look at it. Renewal Rate – we talked about it already. Payment merhods – thats crucial – it works only with online payment methods (credit debit cards, paypal). Thats not the issue in US, UK, but in Brazil or Germany.. So you can‘t offer AR to everyone Ownership – usually lower especially when you work with an eCom partner. They have the credit cards stored, they manage the whole flow, emails etc. You need to pick up a partner which you will have great relationship Data – the same, the partner have much richer data – how many stoppend AR, why the automatic billing failed etc. Again you need to rely on him Markets – it is common in US, UK, CA, AU but it is still relatively new in Europe. Maintanance – once it is setup (and the initial setup is not easy, we talk about it in a minute) it relatively ok to maintain it. E.g. Avast situation with thousands of expiration screens and pages for our 50 supported locales.. Refund rate – higher for AR. People sometimes forget about their subscription and then want to refund.
• #11: Backend and infrastructure – There need to be a connection between your backend and infrastructure and your ecommerce partner systems. A lot of things are store at the partners systems so there need to be some API connection or similar stuff. When customers enable AR, it needs to be sent to your systems so you can send it to your client.. Etc Customer portal – customers need some space where they can disable or enable autorenewal. Or when they can update their credit card information. Email templates and flow architecture – You need to deisgn your communication flow. When do you send your emails (reminder emails, payment failure emails etc.), define triggers, define actions based on emails. Checkout – You need to prepare it for AR: Add a checkbox where customers opt-in to AR or opt-out from AR. Add terms and conditions..
• #14: How do we select markets of AR opt-out? Sales prioritization How AR is traditional in those countries? Share of online payment methods A/B test of opt-out vs. opt-in (both Renewal and Free Registered) AR can have negative impact on the acquisiton conversion rate
• #15: Renewal Rate impact… 100% - these 3 = minus those who turned it off, who failed at billing and minus those who refunded. How to improve those? AR disable rate Communicate better the benefits of AR – from user perspective not that you have more money from it  Payment failure rate When customers’ credit card is expiring send them an email Have a good partner with great PSPs – payment processors (entities which do the actual billing for the partner) More payment attempts – sometimes the billing does not go through for the first time Refund rate Have a transparent communication – reminder email, customer know what will happen Allow customers easily disable AR – if not, they refund it anyway. Talk to the customers, explain it to them
• #17: Account Updated can find a „credit card successors“. If you credit card expires you get a new one. This tool can find the new one and bill the new one instead of the expired one. Just attention/beware – it will increase refund rate. Because people will get an email that your credit card expired and we can‘t bill you automatically. But then this tool finds the successor and successfully bill it. Some customers are then angry and want a refund. But in the end the higher refund rate does not justify the higher renewal rate.
• #18: A trick for countries with high share of offline payment methods. If we would offer AR preselcted (opt-out) we can‘t display the offline methods. E.g. 40% Brazilians pay via Boleto, which is an offline payment method. The conversion rate would be horrible. Therefore we came up with this solution. We display all methods even for optout but if somebody chose Boleto we change turn off the AR and sell him the product without AR.
• #19: PSPs – payment processors. If influence a lot the billing failure rate Story with Nexway and US, difference with DR and US. We tested a local French eCom partner to do AR billing in US and our primary US eCom partner has a significanlty higher renewal rate.
• #21: Customers don’t have their PC anymore – we start messaging that the license is not fixed for the specific PC but they can use it for any PC.
• #22: Isn‘t it awesome that we have an 86 year old customer?! :-)
• #25: Product portfolio Share of sales – in app store – low, not so important but still we could see some potential.
• #26: First we picked 4 the biggest markets (USA manual and auto renewal customers) Then for each of the market we looked at the customer behavior of each of the 3 paid antiviruses – so how people use our Store when they have Avast Pro Antivirus, Avast Internet Security and Avast Premier Then we lookend at bunch of metrics like pageviews, opened carts, orders, revenue etc
• #32: We make it more personal or dynamic. If the customer was not in expiration we offer Upgrade to our best antivirus and the two best selling attached products. If the customer was in expiration we offer Renewal to our best antivirus, then renewal of the current solution and our best selling attached product.
• #35: This is how we proceeded with the campaign: With email you only have one shot so we decided to pick two smaller markets and test few variants there
• #43: If we did not run the A/B test we would probably go with the B design ahd A version.
• #48: Without the A/B test the email campaign would earn 50k less!
• #50: First let me tell you some background information. There was a feeling in the company that we often scare our users that we are not positive enough... So we wanted to test more positive messaging.