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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?

#91

Post by xemdetia »

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.

I think you are approaching it from a different place than I am. If I get into an annual contract I have the expectation that I would be paying the full amount up front to secure the discount and that I would be utilizing the full amount of the term. If after six months I stop then that's for some new reason that was not there in the start. At that time I would expect a rebate for the services that would not be rendered. I could be a six month customer or a ten year and six month customer and have the same expectation. Things change.

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

#92

Post by ipaddr »

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…

If your product is priced well putting a year down makes sense. I only want to worry about you once a year.

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

#94

Post by barry27 »

xemdetia wrote: post #91
carstenhag wrote: post #63

Earlier quoted context omitted.

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.

I think you are approaching it from a different place than I am. If I get into an annual contract I have the expectation that I would be paying the full amount up front to secure the discount and that I would be utilizing the full amount of the term. If after six months I stop then that's for some new reason that was not there in the start. At that time I would expect a rebate for the services that would not be rende…

So use the monthly subscription then. It's preposterous to expect someone to refund you simply because you changed your mind. If you bought a microwave, for example, and then subsequently decided you preferred to use your stove, you wouldnt take it back, would you. You bought access for a year. That is the indivisible product you now own.

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

#97

Post by hluska »

Two things:

1.) My first (and most imminently actionable) conclusion is that you should immediately stop what you’re doing and give yourself some deserved praise. You’ve accomplished something unbelievably cool and achieved what I’d consider the ultimate in validation. Not only have you found some form of product/market fit, but your clients commit.

2.) What does data tell you?? How is your pricing relative to competition? Do you have clusters of users inside of the same organization? Do annual users have anything interesting in common? What does support/suggestion volume look like between monthly and annual? Pick four users who you would like to smoke a joint/have a beer with - are they annual or monthly users??

Basically, figure this shit out - you might be running into pricing theory (charge more) or this might be real serious insight into your customer base.

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

#98

Post by dkubb »

One idea might be to focus on trying to convert monthly subscribers to yearly.

You could offer a subset of monthly subscribers a one-time upgrade to a yearly subscription at a prorated discount.

So people one month into their subscription could get the remaining 11 months for the annual cost minus the 1 month fee they already paid.

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

#99

Post by II2II »

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 suspect that has a lot to do with billing monthly for an annual plan. That leaves people deciding whether to continue paying for a service that they are not using or paying out a penalty in excess of the monthly rate to terminate the service. Both options leave the impression that the company is trying to punish the customer. Contrast that to paying for a year upfront, where the customer is more likely feel foolish for paying for something they did not need.

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

#100

Post by orasis »

dumbfoundded wrote: post #12

If it's not broken don't fix it. I would focus on the top of your funnel to increase sales. Also, you want to have more annual subscribers than monthly. It's almost certainly more profitable. You're essentially giving up 1/6 of revenue in exchange for guaranteed 0% monthly churn. A simple estimate of what your breakeven monthly retention is: 98.5% = (5/6)^(1/12). So if you're losing less than 1.5% of your customers m…

I sooo disagree. Mispricing could be leaving massive value on the table plus increased margin can allow you to pay more for user acquisition.
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