Licensing Renewals Part 2: How to Charge for Renewals

Hello!!

How are we in March? I feel like we're always commenting on how fast time is going, but dang it's really going by fast right now. As we're heading into the third month of 2022, how is everyone doing? Hope you're all hanging in there and giving yourself lots of grace. Make sure to take some breaks now and then! 

This is the second post in a series about licensing renewals, in the first post I talked about the importance of charging for renewals, you can go back and read it here if you missed it. I definitely don't want to pretend that we're experts in licensing, we didn't implement it at all for the first year or so of our business and we're still learning a lot as we go. However, we have learned a lot from our mistakes, and one of the biggest mistakes I made last year was not reminding clients about renewing their licenses and collecting renewal fees. 

I think part of it was just not wanting to deal with the hassle of "bothering" clients and part of it was just not being organized enough to actually know when renewals were coming up. There are already so many administrative tasks that come along with running a business and it can feel overwhelming to add one more to the plate. What I realized was that the income that it could generate was definitely worth the effort and that if I just got organized and stayed on top of it, it really isn't too bad. So let's talk through how I go about renewing licenses. 

Get Organized and Set Up Reminders
The first thing that you'll need to do is figure out what licenses need to be renewed now and the rest of the year. Go through all of your contracts and look at expiration dates to see what is coming up and then make a list. Make a list of all the clients you need to reach out to now, and then set up a way to track who you will need to reach out to in the future and when.

Personally I would say if a license is more than a few months expired I wouldn't bother charging for the past time and instead reach out to renew for the future or have the images removed if the client chooses to not renew. It does feel crappy to realize you lost out on income, but I'm a firm believer in not making clients pay for your mistakes whenever possible. I think it makes for a better working relationship in the long run. 

We keep our list of expirations in Asana, it's the task manager that basically runs our business haha. We have a category for "Past Clients" and when we're done with a shoot, we move the client to that section. I then create tasks for myself to remind me to reach out to the client to give them notice and then another for the expiration date. These tasks may be 1-2 years in the future which kind of feels crazy but I know I definitely won't remember at that point so having it pop up in my to-do's is super helpful! 

Here's a little look at what those tasks look like: 

You can see we have a task for the current shoot at the top, that's where I track everything for the shoot we're working on now, and then below are the licenses with a reminder to reach out to the client a month before the expiration date. 

You can set up a system in any task manager you use, or even just a google or excel spreadsheet. Choose a system that works for you, but the key is that once this system is set up, you have to stay on top of it. So for example, as soon as we deliver this current shoot, I need to put in the due dates for that usage, and as soon as the client renews one of these other licenses, I need to update the due dates to the following year. This way we stay on top of things and continue generating income from our shoots far into the future. 

Give Your Clients Plenty of Notice
As I mentioned, I like to reach out to the client about a month before their usage expires in to let them know that they have one month left. This gives them time to decide if they want to renew, remove the images, or even book another shoot with us to refresh their content. Here is an example of the email I would send them:

Hi Client!

Hope you are doing well!

I wanted to let you know that the usage from our shoot last February will expire on 3/4/2022. The fee to renew the usage for another year is $XXXX (50% of the original licensing cost of $XXXX).

As a refresher, these are the images that are expiring: (provide a link to the specific shoot) and the licenses are for organic social media and your website. 

If you would like to renew the usage for these images, let me know and I will send through the invoice. If you do not want to renew, these images must be removed from your website by 3/4/2022 and not used again on social media or press/pr channels.

We are also currently booking shoots for April and May, if you would like to refresh your content instead of renewing or have upcoming campaigns, I would be love to jump on a call to discuss working together again. 

If you have any questions let me know!

Best,
Elle

Potential Responses
Once you send your client a reminder that the license will expire, there are many ways that they could respond, or, in come cases, they might not respond at all. We have some clients who choose to renew the entire shoot, and some who request to renew specific images. 

It's up to you to decide if you allow for the renewal of just a few images. I'm ok it on a case by case basis. If it was a smaller shoot where we didn't charge very much for usage to begin with, I usually tell the client that the entire shoot needs to be renewed and I'm more flexible with larger shoots that have higher usage fees. It does mean a little extra monitoring on your part if you only renew part of the shoot. 

Some clients won't respond at all, or some will refuse to pay. If they say they don't want to pay, I would give them a deadline by when they need to remove the images, ideally the expiration date. If the images are not removed, I would send an invoice for the full renewal rate. If the client doesn't respond at all to the initial email, I would also send an invoice and see what happens. Typically if clients are hit with an invoice it gets them to suddenly respond quickly haha.

What happens if they don't respond, don't pay, and don't remove the images?  I think at that point it depends on how much you value the relationship and also how much they owe you. If it's a significant amount of money, it might be worth having an attorney draft a letter that you can send to them. Like an invoice, that can also get them to respond real fast, but I would only do this as a last resort after you have attempted to make contact several times. Remember that late fees can also be applied to renewal invoices! 

While we do require clients to remove the images from their site, any third party sites, in-store displays, etc if they choose to not renew, we don't require them to wipe their social channels of the images. We just don't allow them to use the images again on social or continue to run ads. 

That's our system for renewals, I hope it's helpful for you! I would love to hear about your own system or any questions you have!

Is it the weekend yet?
Elle