As we begin the final quarter of 2020, we're gearing up for some great new features and updates in the new year. As part of that, we're retiring several old features that have grown long in the tooth. Out with the old, in with the new!
- Legacy Rates will be removed soon
- Affiliate Program has changed rate of earning
- Processing fee on payment methods will be removed soon
- New OwnerRez pricing coming in 2021
We don't want this to take anyone by surprise, so we're posting about it three months early and we sent out personalized emails to everyone affected to call your attention to this now.
Ready to upgrade right now? You can do that by using our Rate Upgrade tool, and you can read about what the changes are (and what you'll lose from Legacy Rates) by reading our Legacy Rate Upgrade support article.
You'll want to learn everything you can about the new rate system, and you can do that by watching these great videos:
As you'll see in these videos, we've been hard at work on all the new rate features, both to cover a lot of business cases but also to be fast and simple to use - even across a lot of properties. We think you'll like the new system once you get used to using it! Regardless, the Legacy Rates settings will be removed at the end of 2020, so please don't delay in learning the new rates and moving over.
Why not continue supporting Legacy Rates forever?
We announced the new seasonal rates editor more than 7 months ago, and have worked with many users to upgrade and streamline how seasonal rates work since then. There is a reason we switched to the new system and called the old system "Legacy" - we always intended for it to be removed. We wanted to give users a long period of time to experience and learn the new system before doing that.
There are a number of confusing aspects to how the Legacy Rates system works, and those aspects are baked in deeply. Because seasons and rates are not tightly coupled - and you can create different types of rates (week, month, weekend) for one or all seasons - it's easy for users to shoot themselves in the foot without realizing it. For instance, you can specify that "Summer Season" is not associated with property "Acme Cabin" but then create rates for Acme Cabin that are tied to Summer Season. The result is - your rates never appear, and this was common for users to run into. The rates look right, but the season and property wiring conflicts with each other, and it's hard to see and debug as a user. There were many other confusing aspects to Legacy Rates, and Legacy Rates do not easily sync to channel integrations. While OwnerRez has many powerful features that don't align with what channels do, the rates problem was hard to support.
Over the years, as we've grown and matured, we've recognized where features are making our lives harder and realized that removing those features entirely will make everyone's life easier.
If you're part of our Affiliate Program, thanks for spreading the word! We know that many people have signed up because of the passion of our affiliate group!
Effective October 1, the Affiliate Program is changing its rate structure to a tiered 5-year model. You can read about the new rate structure, along with the other program details, in the Affiliate Program support article.
Specifically, the rate is changing from 30% for life to a 5 year period that drops from 30% down to 10% over 5 years. After 5 years, no earnings will be paid out for the referred user.
Why did we change the rate?
This change has been needed - and discussed internally - many times over the past years. This change was not made lightly. In fact, we tabled the discussion several times instead of pushing forward. We originally planned to make this change more than 18 months ago.
To be frank, the previous earning rate (of 30% for life) is too expensive for us to maintain in terms of the cost to "buy" new users as we grow and expand. There is a marketing/sales cost to every user who signs up for OwnerRez. That cost is paid in many ways - online ads, sponsorships, sales calls, onboarding time, support time and affiliate payments - and is a normal metric that businesses have to evaluate to make sure they are investing in the right ways.
We did some analysis of industry norms for affiliate payments and no one (in any industry) comes close to offering 30% for life. Typically the normal rate is somewhere between 10 and 15% (maybe 20) but only for 2-3 years. While OwnerRez has never worried about what others do, we do have to evaluate and fix bad business decisions. We believe that a 5 year model, starting at 30%, is quite generous for affiliate sign-ups.
What about existing referrals?
I'm happy to say that we are grandfathering in existing referrals. The users that you've already referred will continue earning you money at a 30% rate for life. Again, thank you for your referrals!
While we do have to change policies from time to time and cannot always grandfather in existing users, we try to make sure that expectations we've set are carefully considered before making those changes. In this case, we were able to keep the existing referrals as they are.
What about new referrals?
Any new referrals - that is, users that sign up using your affiliate code from October 1 onward - will be paid out according to the new tiered rate structure that ends after 5 years. Your monthly payouts will include both your old and new referrals together.
You may have configured your credit card payment method (eg. Authorize.net, Stripe, Lynnbrook) to add an automatic processing fee (eg. 3%). That setting is going away soon. In fact, the setting has already been hidden for anyone that didn't have it turned on or for new payment methods being configured. The same is true of the discount side - for instance, a 3% discount on the check payment method.
At the end of the year, this setting will be removed from all accounts, even those that have it currently configured. Please take a second, to read our Charging Guests a Credit Card Fee article to see alternative ways of doing this.
Is there an automated way of having the fee assessed based on the payment method the guest selects?
Currently, no. However, the way we were implementing it before was problematic and did not fully work. For instance, no channel (eg. Vrbo) bookings would levy the processing fee since that's not something supported by any channel. Even on direct bookings, the guest could choose the cheaper check method and then use a credit card weeks later or on a second payment. The booking would lock the payment method rule causing further confusion down-stream.
The alternative method - using regular surcharges - will mean that all guests will see the processing fee so that it applies everywhere. If they want to avoid it, they can contact you and you can remove it on a quote for them when they pay by check. Not a perfect solution, but it's better for the time being.
In the future, will there be an automated fee based on guest selection?
There is a new method we have discussed building that will add a processing fee on to the booking based on the credit card payment made at the time the credit card is run. This method should be much more intuitive on all sides because it simply increments the payment at the time it's run and the guest understands that there's a fee added on. On the booking charges, a special Processing Fee will show below the taxes. To be clear, this has only been discussed, not developed or scheduled for engineering. We have no ETA on that yet, but we may release it in the future.
While we're talking about changes, we wanted to drop a quick note that our overall pricing will be changing in 2021 as well. This will affect both base rates and premium rates across the board.
All pricing will continue to be per-property, as it is now, but amounts per property will be changing. We have not yet finalized the changes, so I cannot share the exact amounts yet.
One thing I can share is that Channel Management will be included in the base rate and no longer be a premium add-on. Given the way OwnerRez has changed in recent years, and the doors we've opened for small homeowners, it no longer makes sense for Channel Management to be a premium side thing. It applies to everyone and is essential to vacation rental management in one way or another. Unless you are in a very rare business model, you will use one or more of our Channel Management-based features (eg. Channel Bridge), so it makes sense to just make this a base feature that everyone can use out of the box. However, because of the heavy cost of supporting Channel Management, this means that the base rate will also be increasing across the board.