

Ask HN: Is Providing an Annual Subscription Option Worth the Trouble? - davemabe

I have a subscription based web service that offers monthly and yearly subscription options.  I've found that a surprisingly high percentage of the time the annual subscribers simply forget that they've signed up for a subscription by the time the first year of the subscription comes up and it's time to charge them for a second year.  Most of the time they're shocked and angry that they've been charged even though they agreed to the arrangement.<p>This happens so often that I've thought about scrapping the annual option altogether.  I've also thought about sending them an email before the charge occurs as a reminder.<p>Has anyone experienced this and found a decent solution?
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charliepark
We have the same setup. What we do is to send an e-mail every two weeks before
the rebill, with a reminder that it's about to happen, and that if they want
to cancel, they need to take care of it before <%= rebill_date %>.

Even with that reminder, we still get occasional e-mails from people who
didn't see the e-mail, don't have access to that e-mail address anymore, or,
for whatever reason, didn't unsubscribe in time. We just refund the charge and
delete their subscription.

For what it's worth, we also get e-mails from users who comment on how much
they love the app, how they use it all the time, and how happy they are to
sign on for another year.

If you want me to get into the details of our code, let me know.

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brudgers
Monthly automatic renewal is a convenience for your subscribers. Annual
automatic renewal probably isn't. It can obviously create ill will and doesn't
give you as much flexibility to increase subscription rates.

Opt-in for long term subscriptions would appear to be more subscriber friendly
and avoid some of the issues mentioned. Offering multi-year subscriptions
could provide even more cash upfront without the brand risks associated with
automatic annual billing.

Opt-in communications would likely be no more resource intensive than
implementing email notices about an automatic annual charge. My gut tells me
that, "We hate losing you as a customer" may build more goodwill than "it's in
the fine print."

Based on your post, customer service resources are being diverted to _former_
customer service. And there's no money in that. Good luck.

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msencenb
As mentioned by charliepark I think a reminder e-mail and a very forgiving
refund policy seems to be the best way to do things from a customer relations
standpoint.

On a business side of things do you have data on what the average retention
rate of a customer is? If your average retention rate for monthly customers is
>1 year maybe it's not worth it to even have the yearly subscription from a
revenue standpoint. That being said if the yearly subscription retention rate
is higher you should definitely keep that option available.

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pavel_lishin
How much time are you spending on these people? If they've forgotten about the
charge, they're not likely to be customers anyway, so inconveniencing them
slightly in favor of active customers who are actually interested in paying
yearly might be worth it, especially if you implement the e-mail reminder.

