In plain words
A subscription interval is the time between deliveries. It is chosen to match how fast the product is used up: monthly for a bag of coffee, every two or three months for something that lasts longer.
The interval sets the clock for everything else. A subscriber on a 60-day interval takes half as many renewals in a year as one on 30 days. Each renewal may keep the same margin, but the value arrives half as fast, and the acquisition cost takes twice as long to come back.
Formula
- Renewals due within a horizon = horizon in days ÷ interval in days, rounded down
- Month a renewal lands in = renewal number × interval ÷ days in a month
Worked example
Shipped every 30 days, a coffee subscriber is expected to take 4.24 renewals in twelve months, is worth $53.29 over the year and pays back in month 5.
Shipped every 60 days, on the same renewal rates per order, the engine expects 2.85 renewals. The subscriber is worth $37.11 over the year and pays back in month 10.
The example order
A $40.00 bag of coffee, shipped free, every cost counted
2 declared kinds cost nothing on this option
| Step | Grain | Amount |
|---|---|---|
| Revenue | – | $40.00 |
| Cost of goods | per unit | −$12.00 |
| Pick and pack | per order | −$1.18 |
| Packaging | per parcel | −$0.50 |
| Shipping label | per parcel | −$7.50 |
| Card fee per order | per order | −$0.30 |
| Refunds | percent | −$2.00 |
| Card processing | percent | −$1.16 |
| Contribution margin | – | $15.36 |
| 2 kinds costing nothing | – | $0.00 |
Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.
A longer interval is not simply half the value
Subscribers on an interval that matches their use tend to stay longer, because product does not pile up. A shorter interval than the customer needs brings more orders at first and more cancellations soon after. The right interval is the one the customer's cupboard agrees with.
Using it
Offer the interval that matches real use, and let subscribers change it. A subscriber who can move to every six weeks is one who did not cancel. When you compare offers with different intervals, compare them over the same number of months. Counting renewals favours whichever ships more often.