Recurring Payments and Subscriptions for WordPress Plugins and WordPress Themes

Do you have any idea how well your WordPress plugin or WordPress theme is going to sell next month? And how about the month after that?

As a business owner, you depend on being able to estimate your Monthly Recurring Revenue (MRR) in advance to plan your budget for growth via hiring, marketing, and other viable means of scaling.

Why Are Recurring Payments and Auto Renewals so Great?

Adopting the subscription-based business model means you will be able to predict your cash flow. At any given moment, simply look at your WordPress plugin or theme’s number of subscriptions for a panoramic view of your recurring revenue stream.

No Alarms and No Surprises

With all of this crucial data at your fingertips, it’s easy to see the growth or decline happen in real-time, understand what’s driving it, and then react accordingly. Having a full view of your business MRR stream gives you the insight and information you need to make sure there are “no alarms and no surprises” in your subscription-based WordPress product business.

What Happens When You Don’t Use Automatic Renewals?

If customers are required to manually pay for a license extension each time their license expires, you’re shooting your business in the foot because you’re effectively increasing your churn rate. Some of them may simply forget/can’t be bothered to renew while others might be tempted to go with a competitor now that there’s nothing binding them to your product.

Keep in mind that it’s way harder to get someone to enter their credit card details multiple times than it is to convince them once to use recurring payments with automatic renewals. It also costs a LOT more to earn a new customer than it does a repeating customer.

If you save your customers this trouble and run automatic renewals on their payments, it’s actually a win-win. Your customers will get continuous use of your WordPress plugin or WordPress theme, as well as security, feature updates, and support, and you get to have a stable recurring revenue stream with a minimal churn rate.

A Recurring Payments Comparison

There are several popular systems that will help you generate and manage software licensing for your premium WordPress products. Here’s a quick comparison between the different capabilities of:

The Freemius Recurring Payments mechanism

The Easy Digital Downloads Recurring Payments extension

And the WooCommerce Subscriptions extension

Price

Free

$199 / year
(for 1 website)

$199 / year
(for 1 website)

REST API

Multiple subscriptions

Monthly subscriptions

Automatic renewals

Licensing integration

Customer email notifications

Subscriptions management

Free trials mechanism

No support for free trials without a payment method

No support for free trials without a payment method

Coupons and discounts support

No support for trials with a coupon

A Recurring Payments Comparison​

Price

Free

$199 / year (for 1 website)

$199 / year (for 1 website)

REST API

Multiple Subscriptions

Monthly Subscriptions

Automatic Renewals

Licensing Integration

Customer Email Notifications

Subscriptions Management

Free Trials Mechanism

No support for free trials without a payment method

No support for free trials without a payment method

Coupons & Discounts Support

No support for trials with a coupon

Worried That People Might Not Like Automatic Renewals?

Charging a recurring payment for software is the default model, which the majority of customers are — in most cases — used to, worldwide. In that aspect, you won’t be introducing anything new to eCommerce. Besides, the recurring payments and automatic renewals process can easily be canceled by the customer, if they so desire. Additionally, the built-in Freemius automatic renewals mechanism helps make sure you are totally transparent about it in the checkout process by:

  1. Highlighting the fact that recurring revenues are triggered upon purchase of your WordPress plugin or WordPress theme.
  2. Sending an email notification 30 days prior to an annual automatic renewal.

Most customers will probably appreciate the option to pay using automatic renewals because they avoid the risk of forgetting to manually renew their license (which can have dire consequences, such as a website hack because they missed your latest security patch). You are actually making your customers’ lives easier by giving them one less thing to worry about! Even Matt Mullenweg fell in love with subscriptions and recurring payments, to the point where he feels silly for all the years he did not have the mechanism in place at his company.