Steve Fenton

Check this before you buy a subscription

Everything is becoming a subscription these days. The combination of convenient smaller regular payments for customers, and a recurring revenue-base for the provider means this model feels like the magic formula all around. Whether it’s kitchen appliances from AO, razors from Harry’s, food from Hello Fresh, or a car from Cazoo – you can enjoy the flexibility of subscription-based services for everything. However, there is one thing you really need to check before you hit subscribe and enter your payment card.

So, head to their FAQs, read the terms of service, and check review sites for how you cancel the subscription.

Customer view of cancellation

Whether you are paying a few dollars per month, or a few hundred – when you’re ready to quit it, you need to know that there is a button to press that ends the subscription. If you have to call, write, or turn up in person think twice before you sign up. There is potential legislation coming in some territories that means companies might have to make it as easy to cancel as it was to sign up (including allowing it via the same channel); but until this is made law in your jurisdiction, you need to check it for yourself.

Make sure the provider gives you a simple push-button cancellation process that you can complete easily for yourself.

Don’t trust marketing promises for this “cancel anytime” might sound like they are aligned with simple off-boarding, but some companies are putting roadblocks and traps in the way of a graceful exit. Don’t just check you can cancel, make sure it is self-service and push-button. If they don’t confirm this in FAQs, they probably don’t offer it.

Double check the terms of service to ensure it’s part of the deal and that there are no surprising notice periods or minimum contract lengths, or termination charges.

The business view of cancellation

In a video post by Patrick Campbell of ProfitWell, he reminded companies that 40% of cancellations are due to factors outside of your control. If you make the off-boarding process painful, you are wrecking future reactivation rates.

To understand this, consider these three modes of offboarding:

  1. Self-service cancel button. You click and you’re done.
  2. Q&A driven self-service cancellation process. You answer a couple of questions and possibly get a special offer to stay, but otherwise are done.
  3. Call us to cancel. You call, you listen to robots, push buttons, wait for a human, get a sales pitch. You know the score.

A business that allows self-service cancellations can see around 30% of customers re-activate later when circumstances allow. If your business forces customers down the call-to-cancel route, your reactivation rate is less than 10%. You made life difficult and now the customer doesn’t want to do business with you again.

There is an expanded version of the video post on the ProfitWell blog.

Summary

It should be as easy for a customer to end a subscription as it was for them to start it. This principle might even become law in some places in the future. Even though it isn’t currently a legal requirement, it makes sense to implement it and make it more likely for customers to come back later.

Written by Steve Fenton on