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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?

#81

Post by krallja »

carstenhag wrote: post #63
xemdetia wrote: post #55

Earlier quoted context omitted.

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.

Charging someone’s credit card 12 times a year has a definite cost. Having the funds ahead of time is also worth more than earning the funds one month at a time.

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

#82

Post by pbreit »

I'm a little confused on how you are interpreting the majority of your customers opting for discounted pricing as an indication that you should raise prices.

But, yes, in general a lot of SaaS service could probably raise prices.

And also in general, annual billing is appealing.

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

#83

Post by nikisweeting »

traceroute66 wrote: post #11
glacials wrote: post #4

Where are your customers in the world? Many non-US countries have little/no credit card presence, so if you don't have an international-friendly payment option like PayPal your customers may be using "gift card credit cards" purchased from a store. It's easier to do this once a year than once a month. Ultimately though, talk to your users! That's how you'll find out.

> Many non-US countries have little/no credit card presence Was that statement accidental horrible wording or did you actually mean it ? If the latter, then you must be one of those many Americans that needs to travel more. The rest of the world are not neanderthals who've never heard of credit cards. Go to Kenya (Africa) and the only reason you might struggle to pay by credit card is if the merchant has decided to p…

Credit cards are still pretty difficult to get in Colombia and some other countries in South America. You can get them, but you need a long relationship with your bank, and the process is expensive and time consuming for not very much cash back, so most people don't get them.

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

#84

Post by prox »

throwaway_23124 wrote: post #74
ajaimk wrote: post #10

2 months off for paying annual pricing is a very good deal for someone who plans to use you product on the long term. I personally have a few items I pay for annually because I don't see myself stopping from using it AND there is no obvious replacement. I would NOT recommend changing the 2 months off; you'll annoy your most loyal customers.

I absolutely don't plan to change any existing subscription; everybody always gets grandfathered in forever. The early adopters' invaluable feedback + potential bad rep from raising prices is reason enough. I'm mostly looking for advice on how to price things for my future customers :) >2 months off for paying annual pricing is a very good deal for someone who plans to use you product on the long term. I too pay for…

A company I bought a plugin from, had a one fixed price for all time. They kept all the old customers in that bracked, but new customers have to buy a yearly fee.

So I would create a new subscriber role and simply let your new customers pay a bit more.

It is wise to be upfront with existing customers : say you have need for more funds or more investments, relay that to your existing customers, say you are keeping their price (indefinitely if possible) and that new customers going to go into the new tier.

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

#86

Post by xemdetia »

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.

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

#87

Post by holletron »

throwaway_23124 wrote: post #69
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…

> Yes. The annual subscription is One point to add - If I bought it for a month and liked in enough, I'd get annual for that price just to save me the hassle of getting invoices/receipts each month and having to run them through accounting. One payment, one invoice, done for the year.

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

#89

Post by throwaway_23124 »

pbreit wrote: post #82

I'm a little confused on how you are interpreting the majority of your customers opting for discounted pricing as an indication that you should raise prices. But, yes, in general a lot of SaaS service could probably raise prices. And also in general, annual billing is appealing.

> I'm a little confused on how you are interpreting the majority of your customers opting for discounted pricing as an indication that you should raise prices.

The way I see it, most customers are happy enough after a 30-day trial to commit to my product for at least a full year. That's a good signal for loyalty and the product being worth it for the price. While I agree that the discount aspect is a signal in the other direction, I think overall it looks like people will continue to subscribe even if it's pricier. That's why I'm leaning towards increasing prices. I don't know much about businessy things and I'm learning as I go, so take my opinions with a grain of salt.

I've had some really good suggestions in this thread to talk to my most recent subscribers to really understand why they paid annually straight off the bat, so I'm going to do that first before taking any action.

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

#90

Post by another-dave »

aasasd wrote: post #70
carstenhag wrote: post #62

Earlier quoted context omitted.

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.

I think GP means "cancelling doesn't get you a pro rata refund" (which you wouldn't expect if billed annually) rather than you literally can't cancel :)
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