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How Themepunch has partnered with Paddle to drive its subscription model

20

%

increase in sales

55.7

%

renewal rate

100

%

sales tax compliance

Themepunch (Slider Revolution and Essential Grid) started out selling access to its visual content editor on a lifetime license basis via the marketplace Envato. This approach worked for eight years and helped the company build out its customer base. But as Themepunch grew, Founders Dirk Gavor, Krisztian Horvath and Moritz Prätorius wanted to move in a different direction.

“We were thinking about the best ways to price and package the product. We wanted to start selling directly and offer more flexible options to a lifetime license.”

The prospect of selling directly presented its own set of challenges. With an international customer base, Moritz and the team would have had to manage sales tax in-house, along with other operations like refunds and fraud protection.

This led Moritz and his business partner Dirk Gavor to look for a solution that could help facilitate a more flexible billing model, without leaving them open to sales tax liabilities.

A trusted and convenient solution

Themepunch evaluated a number of different solutions, from other marketplaces to payment providers to all-in-one platforms, like Paddle.

Moritz’s decision came down to:

  • Trust in the provider
  • Product features 
  • Pricing

Paddle ticked these boxes. Moritz explains:

“When you’re thinking about payments, subscriptions, and compliance, there are so many things that can go wrong. Paddle was the most established provider we looked at, with an already successful client base - which reassured us that we wouldn’t run into trouble.”

Paddle is a unified platform that manages payments, subscriptions, sales tax compliance, and more in one place. Comparing pricing, Moritz found that Paddle was favorable against its previous provider:

“Even if sales had declined when we switched to Paddle, we’d still have been making a similar amount of profit than we did with the marketplace because they took such a big share.”

And in comparison to payment providers – even though they might have appeared slightly cheaper at first – when it came to feature set, Paddle’s solution was more complete against Themepunch’s requirements:

“Some [payment providers] didn’t have things like dunning flows. Where these features are missing, you either have to build them in-house or onboard and pay for another solution, which creates too many moving parts.”

A Strategic Partnership

Since integrating with Paddle in 2020, Moritz has worked closely with Paddle’s Revenue Delivery Advisors on new ways to drive business growth. This has included strategic insights for moving to subscriptions as well as optimizations, such as localizing pricing on the website and in the checkout. He says: 

“I didn’t expect us to have such a close partnership with Paddle. Our Revenue Delivery Advisor, Paula, was really knowledgeable in our initial conversations and since then we have found our quarterly business review sessions extremely valuable. It creates a strong feedback loop which benefits everyone.”

In working with thousands of SaaS businesses around the world, Paddle’s Advisors are able to offer strategic recommendations and insights, based on what other businesses are doing and how they use the Paddle product. 

“We really benefit from Paddle’s experience in that way. We can understand what other businesses are doing, then pick and choose the elements that might help us too.”

Better checkout experience lifts sales from day one

On switching to Paddle, Themepunch had anticipated a slight dip in sales but in fact, it saw a 20% increase compared to its previous provider from day one. 

“Paddle’s branded inline checkout allowed us to build a checkout experience that our customers trust - they are happy to complete the process and pay through our website directly.”

Boosting revenue with renewals and upgrades

When Themepunch launched with Paddle, it moved away from exclusively selling lifetime licenses and added tiered subscription packages to its roster. After a strong uptake, Themepunch worked with Paddle to develop its renewal and upgrade flows. 

“Our marketing team is still driving acquisition but as the market becomes more competitive, we know that retaining customers is of equal importance if we’re to scale.”

Themepunch’s move to subscriptions took place in 2020 during the pandemic. With this and a relatively new renewal flow, the renewal rate was predicted to be 50%. 

With Paddle’s help, Themepunch beat this prediction with an actual renewal rate of over 55% – something they are looking forward to improving even more with further optimizations. Moritz says:

Looking Forward

As Themepunch continues to grow, Moritz is looking forward to continuing the partnership with Paddle.

“Paddle is committed to improving, just like we are. There are new features and payment methods coming up through Paddle that we’re excited to implement and see what impact it has on our business.”

About ThemePunch

ThemePunch (Slider Revolution and Essential Grid) is a visual content editor, on a mission to help businesses wow their website visitors with eye-catching content elements.