Thoughts on improving patron billing
As the end of the year approaches, we’re preparing to give creators a preview of some major product upgrades we’re planning for 2022. But first, as part of our commitment to building Patreon with creators and communicating consistently and transparently, we’d like to share a deep dive into our ongoing explorations of patron billing.
There are no changes rolling out anytime soon, but we want to give you some insight into this topic and show how we’re thinking about future plans.
Here is a summary of the main points, but keep reading to the end of the post if you want all the details.
- Our current first-of-the-month billing model is a source of confusion and frustration for many creators and patrons. We’ve been exploring ways to improve it.
- It’s the top cause of support tickets each month. For creators using Charge up Front, patrons who sign up late in the month feel they’ve been wrongly double charged when they’re charged again on the first.
- We’re gearing up to test a potential solution with a few creators who have opted in. The solution we’re testing is a hybrid of the best things about our current model with some new features. (See more details below.)
- We’re in the early stages and want to keep you in the loop. We’ll share what we learn and make improvements before inviting more creators to test the new billing model.
- Assuming the testing goes well, the next step would be to make this new billing model optional in 2022. We’ll also be working with creators on finding solutions to challenges that might prevent them from opting in.
For the short version, watch the video:
For the nitty gritty details, read on…
We know that our current first-of-the-month patron billing model has been a source of frustration for both creators and patrons. It is hurting patron retention and trust, and we want to improve that.
The problems we’d like to solve
Billing-related issues (specifically confusion with first-of-the-month renewals) are the top cause of patron and creator help requests to our support team. For creators using Charge up Front, patrons who sign up late in the month don’t understand why they’re being charged again on the first. They expect Patreon to work like other subscriptions they’re used to that renew monthly on the same date they signed up.
We see hundreds of complaints about this every month from patrons. Here are just a few examples:
“I was overcharged $4. I bought the membership on September 29th, and as anyone would expect, this should’ve been valid for a whole month, till October 29th. However, I was charged again on October 1st. It doesn’t make sense to be charged $4 for only 3 days.”
“If I purchased a monthly membership and bought it today on Oct 12 why am I being charged again on Nov 1 and not Nov 12??”
“The whole thing of being charged for the entire month regardless of what day in the month you subscribe is absolute BS.”
Creators often tell us they don’t promote their Patreon the second half of every month to save patrons the frustration of feeling double-charged. But this means losing out on opportunities to grow their community. And we see the evidence in our data, as patron signups trend downward toward the end of the month.
“[Patreon] is my primary business, but I really only promote it within the first 6 or 7 days of the month. If we could promote 30 days a month, we’d be able to grow so much faster.”
– Dana Alexa
We also see more cancelations than usual in the first week of every month, when patrons who signed up late the month get charged again on the first. Creators have frustrated patrons reaching out directly for refunds and lose earnings and valuable time they could otherwise spend creating.
“The way the system works now is such a pain. I offer refunds to patrons that join at the end of the month now, because the system is just not fair for them.”
– Floortje from Art with Flo
In addition, our current billing model makes it very difficult for us to offer features like gifting and trial memberships, which creators have been requesting for years.
How creator feedback is shaping our thinking
To find a path forward, we’ve been gathering and weighing feedback and researching solutions. We read through support tickets and comments on our forum, our official creator community Discord, Twitter, and Reddit. We did in-depth interviews with a variety of creators about how they run their memberships and deliver benefits to learn more about the impacts of any potential billing change. We also tested different billing approaches and checkout flows with patrons and potential patrons.
In our search for solutions, we explored anniversary billing, where renewals happen on the same day of the month you signed up. But that alone doesn’t solve all of the challenges with billing — and it presents some new ones.
First, we want to make sure that patrons who support multiple creators will only receive one bill per month — not multiple bills throughout the month —to make budgeting easier and to reduce payment fees for creators. We also want to ensure that creators can continue receiving one steady payment at the same time each month, as they do now.
And we know that some creators on Patreon have systems for delivering benefits that rely on first-of-the-month billing, including many visual artists, pin-of-the-month clubs or 3D model printers. A change to billing would require them to make substantial changes to their businesses that they’re worried could cause them to lose income. We’re going to spend time with these creators working through their challenges to see if we can help solve them.
A new billing model and how it would work
Based on creator feedback, we’ve started designing a hybrid billing model that we believe could be a path forward. The project is in the research and testing stages and we’re still far from rolling it out. We’re going to test it with a small group of creators before the next step of an opt-in phase for all creators.
In the future, if you were to opt into this model, here’s how it would work:
- Nothing would change for your existing patrons. They would continue to be billed on the first of each month.
- Patrons who are subscribing to their first creator on Patreon would renew on the same day of the month they signed up.
- Patrons of existing creators, who subscribe to a new creator, would have all charges combined into one monthly bill on the day of their oldest existing subscription.
- Creators would still be able to withdraw one monthly auto-payout, like always.
- There would be no increase in payment processing rates and no additional fees.
We’re exploring options for prorating/discounting when a patron subscribes to multiple creators, and combining their bills causes their renewal date to come up before they’ve had a full month. We know that prorating for partial months will work well for some creators, and not others, so we’re going to test this further and talk to more creators before we decide on the best path.
We’re gearing up to test drive an early version of hybrid billing in a pilot program with a handful of creators who are excited to try it with us. Here’s what they have to say:
“This is a dream come true. I think we have begged for this feature for the last 5 years on Patreon and would absolutely love love love to be a part of testing it!!”
– Andy from Fantasy Footballers
“… hybrid billing simply means patrons actually get a full month, removing this entire quandary of late-month new subs and moved subs, and the variance of value that comes along with that… there’s literally no reason for us to not participate, since it only helps our audience in every conceivable way.”
– Colin from Last Stand Media
“We get around 40 or 50 complaints every month from patrons who sign up towards the end of the month and then get charged again on the first, so we’re really looking forward to a solution to this problem, and are happy to be part of the pilot test.”
– Rick from Blind Wave
We want to start with a very small group so we can test, learn, and work out any issues that arise before we invite more creators into the mix. The goal of the pilot is to see whether a hybrid billing model can solve one of the top patron pain points, which leads to better patron satisfaction and retention. If it does, the next step would be to make it optional in 2022.
As we test and learn, we’re keeping in mind creators who rely on first-of-the-month billing to deliver benefits. We will work with these creators to understand what improved tools and resources they’d need to make this model work.
Rest assured, nothing is changing anytime soon, and we’re not going to rush anything that impacts all creators. We are going to leave ample time to work with creators on a solution together.
Learn more and get involved
We will keep you in the loop as we continue to test and learn. Here’s how you can learn more and get involved:
If you have more questions, see this FAQ.
If you want to join the conversation about this topic with other creators and the Patreon staff who are working on billing, see this channel in our creator community Discord. The channel will be open for Q&A until 2pm EST on November 23, 2021, when it will be closed.
If you’re interested in being part of the pilot, sign up to be notified when we’re opening it to more creators.
If you’re a creator who currently relies on first-of-the-month billing to deliver benefits, sign up here if you’d like to be involved in helping us improve benefit delivery tools.
If you have thoughts on patron billing you want to share with us, let us know here.