I'm with everyone else that I would prefer to pay annually up front if the cost is not too high and having the service contract up for that period makes sense. From a more basic business flow I would expect that if you offer a straightforward $10*X/year plan that your expenses are built around that cost. I would expect the monthly cost to be higher to reflect the risk of not having a committed customer base and the overhead of getting payment from those customers.
As other people mention it would be assumed that $10*X/year would be billed upfront and that you would be 'paying' yourself out of that sum as each month is invoiced. Are you accounting for your liabilities vs. assets correctly and are still sustainable? Are you profitable month to month? Are you meeting your target income after expenses from whatever $10*X/year was supposed to be? Are you sure you are calculating all your expenses precisely from the prior calculations?
If you have 'yes' to all of the prior questions maybe you need to decide where you want to take your business in other areas. It might make sense to just focus on overall growth and not sweat this signal. It would be good to establish the churn rate individually for annual and monthly customers by activity as well as cancellation.
If any one is 'no' you might just have to raise prices because you have to raise prices because you're not getting out of the business what you expect. Raising prices to ensure that you are not just surviving but getting your piece is OK. At the same time maybe the price point is just a good price point and you could focus on growth.
More philosophically how would you subscribe to your service as a customer? If you'd say annually maybe it's just a service that works better annually. I would say Netflix is better month to month because the moment I stop using it is the moment it stops providing value, while a DNS name I have multi-year agreements on because even if I stop actively using it, it's still worth having the arrangement because I am paying just to have it be there for me.
As other people mention it would be assumed that $10*X/year would be billed upfront and that you would be 'paying' yourself out of that sum as each month is invoiced. Are you accounting for your liabilities vs. assets correctly and are still sustainable? Are you profitable month to month? Are you meeting your target income after expenses from whatever $10*X/year was supposed to be? Are you sure you are calculating all your expenses precisely from the prior calculations?
If you have 'yes' to all of the prior questions maybe you need to decide where you want to take your business in other areas. It might make sense to just focus on overall growth and not sweat this signal. It would be good to establish the churn rate individually for annual and monthly customers by activity as well as cancellation.
If any one is 'no' you might just have to raise prices because you have to raise prices because you're not getting out of the business what you expect. Raising prices to ensure that you are not just surviving but getting your piece is OK. At the same time maybe the price point is just a good price point and you could focus on growth.
More philosophically how would you subscribe to your service as a customer? If you'd say annually maybe it's just a service that works better annually. I would say Netflix is better month to month because the moment I stop using it is the moment it stops providing value, while a DNS name I have multi-year agreements on because even if I stop actively using it, it's still worth having the arrangement because I am paying just to have it be there for me.