How Patreon’s new billing model option can work for your business

Grab your headphones and cozy up for the first-ever episode of Backstage with Patreon. In each episode of this weekly podcast, you’ll get a look behind the curtain on how to build a thriving business on Patreon. Creators who have built a membership business and active community will share their methods, challenges, and tips. And, Patreon staff will give the inside scoop about new product features and best practices for creative entrepreneurs.

In this episode, the product manager behind Patreon’s simplified billing model explains about how this new system works and what problems it solves for creators. Listen to find out how creator input shaped simplified billing, how to apply this model to your membership, and get a peek into what updates are coming next.

Episode transcript

Brian Keller:
Hello creators. You are Backstage with Patreon, where we open the curtain on how to build a thriving business on Patreon. I'm Brian Keller from the Creator Success Team, and today we're speaking with Jenn Pugh, who's a Product Manager at Patreon, and she's actually built her career in product management at companies spanning educational courses and customer relationship tools.

So, she really understands how creators think about their creative work and how they build a relationship with their community. She is in charge of a couple different areas at Patreon. One is insights, the way we present dashboards and metrics to our creators. And we'll actually be focusing on a second area: Patreon's billing model.

And it's been a long-term project to really understand how creators and their members think about billing and how we can make it a better experience all around. It's a complicated topic because creators run their membership in dramatically different ways, and it's such a high priority for us to reliably handle payments for creators.

So it's a topic we know creators care a lot about. We're looking to make it easily understandable and help creators think about and decide about how they do billing, how they do promotion, in their membership.

So let's get started with Jenn Pugh on Backstage with Patreon, and just start off, some creators aren't even aware or thinking about billing. They may know that we've made some changes and new options there. They may be considering it. How do we want to tee up and let them understand what they can do now with billing on Patreon?

Jenn Pugh:
Thanks for the question. What we recently launched is called subscription billing, and it is a new way to charge your patrons, which will effectively allow new patrons who sign up to be charged a month after the day they signed up. Which is very straightforward. It is what creators and what patrons expect billing to work like.Very intuitive. It's what patrons expect. It's the way most patrons already think happens when they sign up.

So in terms of kind of meeting your patron's expectations, it's the best billing model around for that. We obviously recently launched it. We've got a lot of creators who are opting in and are deciding to make the switch over to this new billing model, which is really great because it solves a lot of problems for creators.

For, especially for patrons during their first month, in those first few weeks when they sign up, when it should be, you know, really exciting and a really, really great experience for patrons. What we've found over the past few years is that that's not always the case for patrons based off of when they get billed.

So it's something we're really, really excited about that we've solved those problems with the new billing model. And it's something a lot of creators are really excited about. It's. Putting billing kind of where it should be, which is in the background. I think one of the things I'm most excited about, about simplified billing experiences in general is that billing kind of stays out of the way of the membership experience, which is, I think, where it should be. Patrons want to be enjoying the content that creators are putting out into their memberships. Creators want that as well. And with this new billing model, there's no hiccups or any weirdness around when you're gonna be charged, which for some patrons has been distracting and, and a poor experience, in some cases. So with the new billing model, things are a lot smoother, a lot easier for those first few weeks, especially when someone first joins. Creators who are on it are loving it, which is really exciting.

Brian Keller:
Yeah. And you talked about some of those issues we were trying to address for a patron, a feeling of getting “double billed” if they joined late in the month, and then have a first-of-the-month bill. And for creators — I'd love to hear more about what we see from creators where they were not necessarily promoting all the time, some of those challenges that this helps address.

Jenn Pugh:
Yeah, absolutely. One of the things that we have seen over the years is that creators, you know, obviously don't want to have a bad experience for their patrons. So, what they'll do, is basically stop promoting their Patreons midway through the month, so they'll stop talking about it, which means people who may have, you know, just started to listen to the podcast, you know, or started to follow the content that the creator's, creating, don't hear about Patreon for a few weeks. That could be critical in getting those folks onto your membership.

So, one of the things that's really great about this new billing experience is that creators can promote their Patreons all month long, which is exactly what they want to do, and what is best to kind of drive growth for your membership. It should be something you never worry about promoting. You should be able to say, “Come join my Patreon at any time” and that is true. Now, creators who are on this new billing model can talk about their Patreon at all times throughout the month, especially at the end of the month, if they want to drive people to join. So that they don't need to, you know, think about their posting schedule as much or, you know, “Is it past the 15th?” or something. Or, you know, “Should I stop talking about my Patreon page because folks might have that unfortunate kind of double billing or like an early charge experience?”

Our other billing models are charging patrons on the first of the month, as opposed to, you know, on their monthly anniversary of their join date. It's helping creators promote more often. What we've found as well is that since we launched this new billing experience, creators are promoting more often. That was something we were really hoping we were going to be able to provide: making it easy for creators to promote.

More often than that is something that we are seeing, creators are promoting a lot more often, actually. That is, of course, something we always recommend creators do. You should be promoting your page, with as many posts as possible, throughout the month, wherever your content's being created.

You should be talking about your Patreon. That's the best way to continue to grow and to ensure that your growing audience knows that you have this incredible membership and that's what we're seeing. We're seeing people promote more often and it's driving more growth for creators who are on this new billing model. That's exactly what we wanted to see.That's the best case scenario for creators. And obviously it's also providing a great experience for patrons. So, it really feels like a win-win for everybody. It's really exciting.

Brian Keller:
Yeah. And when pledges and billing starts to get spread out a little bit more across the month, that actually has some surprising benefits for the way Patreon as a company actually can support our creators, and help them. What should creators know about how that's actually going to help our support for them?

Jenn Pugh:
It's a great question. There's so much that we will be able to do with this new billing model. It really kind of opens the door for Patreon to be able to make some really cool new features possible that we've been wanting for a long time and we know that creators and patrons alike have been wanting to see for a long time. Things like gifting will be possible on this new billing model down the road that something that we're actively exploring. So there's going to be things that will be unlocked just by switching to this new model, because of the way patrons are paying throughout the month. And there's not this big influx that happens at the beginning of the month or the rigidity of that. It's really going to open doors for the types of billing solutions and monetization options that we have available in the future. So, we're really excited on the Patreon side of things. Like, the team is very excited because it means we're going to be able to move a lot more quickly on getting some of the features that creators and patrons have been asking for, for a long time.

We're going to be able to start working on those things, because of the way that the system is set up, we don't need to get into the details of, like, the infrastructure of how the system is set up. But it basically gives us a really clean foundation for us to build upon and more quickly roll out some cool features that people have been asking for for a long time.

Brian Keller:
Yeah. And it sounds like the process involved a lot of touchpoints and feedback with creators along the way. I'd love to have you highlight a type of insight or an adjustment we made based on hearing from creators.

Jenn Pugh:
Yeah, that's a great question. We ran a pilot for this. We had a couple hundred creators who were with us in this pilot program for a number of months and it was extremely helpful for kind of helping us figure out, you know, what are some of the things we should adjust and change along the way.

One of the key things that we made a change on, one of the solutions that we had come up with was around resolving the double billing problem. So, that problem essentially being that patrons when they first sign up are charged, you know, full sticker price for their membership. And then on the first, the way our current — our kind of legacy billing model — works is that we'll charge those patrons the full price again on the first because billing has just been running on the first.

So, one of the initial solutions that we were looking at, was effectively discounting the first pledge and continuing to charge patrons on the first, so that patrons were still being charged soon after, in some cases, their first signup date, but their initial charge was slightly less, and that effectively ensured patrons were only paying for the amount of access left in that month when they first signed up.

But as you can imagine even just explaining this, what this means for creators is that they're not getting the full sticker price when folks sign up, which has other issues or causes other issues with, you know, kind of your catalog access and what are people getting for the sticker price on your tier.

And then it also still means we'd be charging people again on the first. So some of the initial solutions that we'd tested and came up with during the pilot, we ultimately scrapped because of the pilot and, and the experience and the learnings we got from that. And ultimately it's really helped us kind of shape and hone the experience that we recently launched.

So, the experience that is now live is not the experience I just described. It is much simpler. We really kind of took everything down to the nuts and bolts and took a step back even and just looked at what is the absolute simplest thing that we could provide? What is the most basic, expected, most intuitive billing experience possible for patrons when they sign up — and it is being charged a month after you signed up?

So, you charge full price, you're charged full price when you first sign up, and you're charged again a month after, you know, for as long as you want to be a member. So where we landed is really simple, straightforward. It's a really clean experience and there really isn't much complexity at all. It's easy to explain to patrons. It's easy for creators to understand and explain to patrons if they ever have questions about it, and there's no weirdness around, you know, how much the creator's getting paid or, like, when that's coming in. And the very variability of that with a couple of our earlier solutions was really tricky.

So, I'm really happy that we were able to run the pilot for it as long as we did to really find the solution that was simplest, that checked all the boxes for folks. So, yeah, that's, that's a little of what we learned and kind of how it shaped things. That was just one of many learnings that we took from the number of months that we've been studying this and testing. But, ultimately all of those learnings, you know, led us to, to the great experience we have now with this new billing experience.

Brian Keller:
Yeah. And I know your team is taking some more of that input from creators and finding other ways that we can add to the capabilities, the insights, the data we provide to creators to help them on this journey. In thinking about the way they do billing, what are some of the things that creators might be able to expect that your team's working on to help make it easier to manage benefits or understand when people are paying and getting billed?

Jenn Pugh:
Yeah. Great question. This is definitely a journey we're going to be going on for the next few months. We're not done. And some of the things we're going to be following up with in the coming months will be improvements to some of the workflows that creators have to deliver benefits, for example.

It's really important for a creator to be able to find very quickly the list of eligible patrons who are owed a specific thing. So, if you're a pin-of-the-month club type creator, you can go in and get the list of folks who paid between a time period or paid a certain number of times during that time period, or paid a certain amount within a given time period or something so that you as a creator can still have flexibility around, you know, if you're going to deliver benefits on this weekend, during the month or the following weekend, during the month, you can have, you know, variability in that and always be able to pull the right list of patrons so that you're not, you know, you don't have to go in multiple times a month to grab like a snapshot of who was there at that time.

And then later on, so we're, we're making some improvements to workflows to save folks time and just to make it really easy and reliable, for being able to get to the right list of patrons to deliver. And that's not all. There will be other improvements and things that are attached to this new subscription billing experience that will help creators down the road.

So, some of the things we're looking at are the ability to kind of predict into the future what you're going to be pulling in from, like an earnings perspective based off different dates during the month. So we're looking at adding more, kind of, predictability and, like, future planning into it — the way that creators deliver benefits and its relation to billing.

So let's say, you know, if today's towards the end of the month and you want to understand, “Okay, at this time, next month or two months from now, or three months from now, what can I expect my earnings to look like based off of when people are gonna be paying throughout the month and when renewals will be coming in?”

That's the level of insight we want to be able to provide creators. We want creators to be able to go into our product and be able to see, like, let me try to figure out, you know, three months from now when I'm getting ready to go on tour. How much can I expect to be earning from my Patreon at that point, and can kind of plan more effectively that way.

I think it's going to be really powerful and helpful for creators. So, yeah, there's a number of different avenues, again, that will be unlocked just by doing billing in this more optimized way. So I'm really excited about it. I think it's going to add a lot of value and importantly save a lot of time for creators. It's going to be great. I'm excited.

Brian Keller:
Yeah, I'm really excited for it. Definitely from the creators I talked to, some have been waiting for this change in billing for a long, long time. They're ready to sign up on day one and adjust to it. Others want to see some more of those capabilities or workflow things we're offering to really make sure it's a fit for their business.

And so many creators are looking for that data understanding, ability to predict where earnings are going. So I think a lot of creators will be excited to hear about all those changes. In the beginning, you talked about the reaction we're hearing from some of those creators once the new billing model was available.

I'd love to hear either some themes you've heard from there or any specific examples of what we’ve heard from creators.

Jenn Pugh:
Mm-hmm. That's such a fun question. There have been a number of different things that have come out of it. I think the strongest theme has been, kind of, relief and excitement. Many creators have been dealing with patrons asking for refunds, you know, during the first week of the month, because those patrons weren't expecting to be charged and then were charged.

And it's a really bad feeling as a creator to know that one of your biggest fans joined your membership, had a bad billing experience, and now you have to resolve that. And it feels bad. It's a bad experience for patrons. It's a bad experience for creators. So to have that eliminated is a huge relief to creators.

We've had creators writing in saying things like,”This is the first time in two years where, I didn't have to do a single refund at the beginning of the month because everyone was just charged the way they expected to be charged. All my new patrons had a good experience.” So relief, I would say, and excitement that this is now finally resolved.

And also I think there's a real kind of — a separate kind of theme around creators being excited that this is now, again, going to the background, like this is just the way billing is supposed to work. This is how patrons have expected it to work for a long time. So there's a sense of, you know, “this is just how subscriptions work” and there's a lot less complexity in terms of what they have to tell their patrons. So, there's some time saved there, but also the patron experience is so much better. And when your patrons are happy, creators are happy.

So, yeah, the reactions from creators across the board have been positive, excited. And I'd also say, to your point, we're also hearing from creators who are like, awesome I can't wait to switch. I'm going to need X, Y, Z thing before I do. You know, I want to make sure I can deliver benefits in the way that I currently deliver benefits, and here's where I need to do that. So, we're listening to that as well and making sure that our roadmap is taking that into account and that we're focusing on the right things for the additional workflows we're going to be supporting.

So, it's been great though overall; the reaction's been really positive. And I think creators are most excited that there’s a better experience they're able to provide their patrons. So yeah, it's been great.

Brian Keller:
Yeah, and I want to emphasize one of the points you made early on that we're also looking at creator promotion activity, and it sounds like we have some real data that shows once creators are on this billing model, it leads to a change in how they promote and how they acquire patrons.

Jenn Pugh:
Yeah. Yeah, it absolutely does. What we've seen so far is that creators who have switched to simplified billing are promoting their pages much more often than they were previously. So, a number that I can share is that some creators, or I should say, most creators, that we're seeing who have switched to simplified billing are promoting their page over six times more often than they were.

And given what we know about the effectiveness of promoting your membership and talking about Patreon and letting folks know on a consistent basis that you have a Patreon, and “here's where to go to subscribe and here are the tiers, I'm offering all of that,” it really makes a difference with those creators getting patrons.

Because even if those patrons don't sign up right away, it plants a seed. Talking about your Patreon over and over again and having that be part of your consistent, kind of, “talk track” about the content that you're creating and the membership that you're offering, is so, so critical to growth. So, well, we're really excited to see that creators are promoting their pages more often because that leads to those creators seeing a spike in patrons as well as in new patrons signing up.

So, it's a really good thing. I think it's unlocking a lot of new growth for creators and we're just at the beginning, so, I'm excited to see where it goes.

Brian Keller:
Awesome. Well, so we've covered a little bit the journey around billing, the creator input there, how it's been rolling out, and the reactions from creators and a little peek into the future of what we're going to be looking to add and streamline for creators. So, with that, Jen, thanks so much for sharing your insights with creators here.

Jenn Pugh:
Thank you so much, Brian.

Brian Keller:
To catch every episode of Backstage with Patreon, follow or subscribe in your podcast app or YouTube. We also have transcripts available here. You’re growing as a creator by listening to the show, so why not share the insights from this episode with another creator on Patreon or who is running a creative business. We’d love to have you as an active collaborator with Backstage with Patreon. Come join the discussion in the Patreon Creator Discord. Follow the link in the episode notes and you can get answers to your follow-up questions directly from the guests, and weigh in on what topics we’ll be covering next. Editing by Tyler Morrisette. I'm Brian Keller. See you next time, backstage.

Catch every episode of Backstage with Patreon by subscribing in your favorite podcast app. Transcripts for every episode are linked from the show page. To talk more about simplified billing or weigh in on what topics we should cover next, join the discussion in the Backstage with Patreon channel in the Official Patreon Creator Community Discord server.