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Ask HN: My startup has more annual subscribers than monthly. What to make of it?

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Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#61

Post by VonGallifrey »

hurflmurfl wrote: post #43
NikolaNovak wrote: post #26

Earlier quoted context omitted.

Dunno, in a lot of europe, though credit cards are readily available , most of my family (I have relatives in Germany, Austria, Slovenia, Croatia) doesn't have or want them. They have forms of payment which are strange to me but basically are some form of bank debit card, accepted everywhere. Or fancy phone / app payment methods we can only dream of here. I didn't read the OP as necessarily implying technical or cult…

When a form on a web-site says CC (Credit Card) I can always pay with my debit card. (Unless you're talking about another sort of debit card that isn't what I call a debit card - "a MasterCard/Visa/etc with no overdraft). To me it seems like some people use the term "credit card" for any bank card, while some actually mean the "credit" part. While "credit" (non-debit) cards don't seem to be THAT popular in the Europe…

There is another debit card here in Germany.

I have such a card and it is neither a MasterCard or Visa card. It looks like a Credit card with a Chip and magnetic stripe, but it has my IBAN on the front instead of a Credit Card number. These cards are the standard here in germany. If you have a german bank account you get one of these.

You can use it pretty much like a Credit Card and you can even pay contactless with it, but I think you can only do so here in Germany. Though it does not work if you only support credit cards.

Since these cards are standard and free some people do not bother with a credit card.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#62

Post by carstenhag »

aasasd wrote: post #57
matco11 wrote: post #47

Because the discount rate of the yearly plan is financially very attractive (17% off), there are really two main reasons people go for the monthly option: 1) they are unsure if they are going to like your product enough to be willing to go for the bigger commitment of the yearly subscription 2) they can’t afford the yearly payment upfront (this is especially valid for very expensive subscriptions) On the yearly subsc…

> On the yearly subscription, do you charge for the entire year upfront? I mean, to my knowledge, that's the whole reason to give a discount for the yearly payment. Isn't it?

Also, but not only. Yearly subscriptions in itself guarantee that the user commits to 12 months and can't cancel during those 12 months

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#63

Post by carstenhag »

xemdetia wrote: post #55
graeme wrote: post #31

Earlier quoted context omitted.

Number 2 is actually pretty common. Maybe not as an advertised policy but if you write to cancel reps will often give a pro rates refund. This may happen more in businesses which figure you may be back someday.

I would go further and expect number 2 to be the norm. If I pay for a service and I'm allocated and the service is up and available for 6 months and I have 6 months left I would expect the refund to be 6 months and not from the beginning of the contract. They've already spent the money and you've already earned the money at that point.

But then it doesn't make sense to have the yearly subscription (and 12 months of contract duration at a time). Then you can just have the monthly subscription.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#64

Post by leetcrew »

carstenhag wrote: post #62
aasasd wrote: post #57

Earlier quoted context omitted.

> On the yearly subscription, do you charge for the entire year upfront? I mean, to my knowledge, that's the whole reason to give a discount for the yearly payment. Isn't it?

Also, but not only. Yearly subscriptions in itself guarantee that the user commits to 12 months and can't cancel during those 12 months

if it's not upfront, they can always stop paying. you don't want to sue your users for breach of contract over a $5/month subscription.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#65

Post by shoto_io »

There are so many things one could say about this.

But, from my own experience I have to tell you to do this: Talk to your customers. But not randomly. Talk to them immediately after they have bought their product.

Then go and "interrogate" them. Don't ask directly, but indirectly why they chose this or the other plan. The key is to really understand what the circumstances were when they decided. What made them flip into one or the other direction.

You won't find that knowledge "online".

If you want to know more about the interview style, watch this video: https://www.youtube.com/watch?v=blTNLVuRU6k - starts at around 14:30. I would watch the whole thing though.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#66

Post by nielsole »

aasasd wrote: post #57
matco11 wrote: post #47

Because the discount rate of the yearly plan is financially very attractive (17% off), there are really two main reasons people go for the monthly option: 1) they are unsure if they are going to like your product enough to be willing to go for the bigger commitment of the yearly subscription 2) they can’t afford the yearly payment upfront (this is especially valid for very expensive subscriptions) On the yearly subsc…

> On the yearly subscription, do you charge for the entire year upfront? I mean, to my knowledge, that's the whole reason to give a discount for the yearly payment. Isn't it?

Yearly contracts paid monthly give a great income predictability already which mitigates risk. Also customer retention / CLV might be better, because users pay until the end of the 12 months despite stopping using the product earlier.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#67

Post by gwillen »

banana_giraffe wrote: post #54
frosted-flakes wrote: post #52

Earlier quoted context omitted.

All of Canada uses debit cards that don't work over the credit network. Some banks allow you to request a VISA number that's linked to your chequing account (for online use only), but debit cards use the separate Interac system.

Interesting. I should have been clear: I suspect debit-only cards are rare in the US. Outside the US: No clue at all.

I have heard debit-only cards in the US referred to as "ATM cards" occasionally, but that was a few years ago. I think if an account belongs to a minor child, it may not be possible to get a regular debit card (that also works with the credit card network), but an ATM card may be possible? That's the only reason I'm aware of to get one.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#68

Post by AdrianB1 »

Don't take the idea to increase prices seriously, it is sometimes illogical: people talk about increasing prices and helping people to afford services in the same sentence. Keeping the prices constant and increasing the userbase may be a good way to increase your startup value, but extracting more money from the current users is not right.

Anecdotal evidence: if I perceive something as good value long term I am paying yearly for 2 reasons, one is the discount for doing it and second for the convenience of not having to care about monthly payment. I had Netflix suspended because they messed up the payment (they took the money, 3 times) and I had no solution at 1AM when I had the time to watch a movie, a yearly payment is a lot safer for such cases. Maybe some of your clients are like me.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#69

Post by throwaway_23124 »

matco11 wrote: post #47

Because the discount rate of the yearly plan is financially very attractive (17% off), there are really two main reasons people go for the monthly option: 1) they are unsure if they are going to like your product enough to be willing to go for the bigger commitment of the yearly subscription 2) they can’t afford the yearly payment upfront (this is especially valid for very expensive subscriptions) On the yearly subsc…

>On the yearly subscription, do you charge for the entire year upfront?

Yes. The annual subscription is >How is the distribution of vintages of your user base?

My startup is fairly new (12-18 months old), so I don't have much insight into such statistics. However, I will note that growth has somewhat stagnated (>it’s almost always a good idea to do it without disrupting (too much) your existing user base.

Absolutely. I always grandfather existing users and I have a few dozen very early users who are paying peanuts compared to the current pricing. I value their super early feedback a lot in shaping my startup, so I'm happy to grandfather their subscriptions forever. I even get emails every now and then from some early users asking if I could "upgrade" them to the current, higher pricing!

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#70

Post by aasasd »

carstenhag wrote: post #62
aasasd wrote: post #57

Earlier quoted context omitted.

> On the yearly subscription, do you charge for the entire year upfront? I mean, to my knowledge, that's the whole reason to give a discount for the yearly payment. Isn't it?

Also, but not only. Yearly subscriptions in itself guarantee that the user commits to 12 months and can't cancel during those 12 months

> can't cancel

That's how you get angry posts on social media. See: Adobe.

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