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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?

#111

Post by x0x0 »

kelnos wrote: post #79
nielsole wrote: post #66

Earlier quoted context omitted.

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.

There's more risk there, though, no? A customer could cancel before the end of the year and simply stop making the remainder of the payments. Sure, there's recourse, both through the credit card companies and courts, but that takes time and effort and possibly lawyers (aka money). If you require annual customers to pay the entire year up front, you get the money, and that's that, barring credit card chargebacks.

and they're a pita for business users -- they have to deal with either reimbursing or at least tagging 12x the charges on their personal or business card.

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

#112

Post by floatingatoll »

Dealing with internet/web saas stuff is the sort of thing I don't want to deal with more than once a year, so I wouldn't interpret that tendency towards 1-year plans as any kind of statement about prices. Honestly, I would replace the 1-month plan with a 3-month plan (no discount) just to discourage short-term customers, but that might discourage some customers.

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

#113

Post by orasis »

astrocat wrote: post #105
orasis wrote: post #100

Earlier quoted context omitted.

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

Your approach sounds like the mindset of chasing growth instead of sustainability. Short term gains over long term value.

Quite the opposite. As a niche becomes saturated with competition, user acquisition costs rise to approach the level of the highest margin player. If you want to have a sustainable business it behooves you to have better optimized margins than the competition.

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

#115

Post by dataflow »

Maybe this is obvious, but the optimal thing for a user who needs your product is to pay for the first couple months, then go yearly once they know they'll keep using your product. So it should be expected that most people will be on yearly. There's no reason for most customers to continue on a monthly plan forever. The behavior would be the same no matter the price (unless it's so high that people might sign up monthly once in a blue moon and "batch" their usage then), so I'd only take this as a signal that your product is good and it has loyal customers, not that its price is too low or high per se.

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

#116

Post by user5994461 »

jimkleiber wrote: post #109
ipaddr wrote: post #92

Earlier quoted context omitted.

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

I've often thought about giving a one month option and a three month option (quarterly) and yet I haven't really seen this in SaaS... do you think there might be some people who would prefer to only worry about it once every three months?

It's the worst thing you could possibly offer.

Customers will notice a "large" bill every three months. It's just infrequent enough that they don't remember what it was from 3 months ago. It's just large enough that they really want to check where the hell is all that money going to. Customers will investigate and that can only result in cancellation.

A monthly subscription is designed to be easily approved by a middle manager (and fly under the radar). A yearly subscription is designed for customers who plan ahead or cannot do recurring payments (recurring invoices/approvals is a huge pain to deal with).

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

#117

Post by noodle »

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…

> To be very blunt because I'm anonymous, how do I monetize this stickiness to extract maximum value from future customers?

Addons/extras/upsells. Find some features that might make the most sense as something that exists outside of your current pricing structure, maybe due to specific fixed costs of some sort that don't make sense to roll into the plan pricing, and offer them a la carte at like $20/mo or something. This would allow you to bump your ARPU a bit.

Another option is services. Not knowing your product, its hard to make any concrete suggestion here, but data migrations and initial account setups are common ones.

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

#118

Post by trif1 »

I think the only thing i can add is that a more complex tier system with more value added stuff is the only way to go. Its not necessarily a bad sign that you have more annual than monthly subscribers in fact its a sign of a healthy product campaign that is ingrained for long term exposure. Perhaps you could offer another tier of multi year subscriptions and see who is really a long term client and try to add some extra value for them rather than offering a discount. Cheers!

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

#119

Post by barry27 »

hluska wrote: post #97

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 compet…

yes, hluska, figure this shit out, well done. It didn't occur to you that the existence of this post signals the author's desire to do exactly that?

Also, "pick four users you'd like to smoke a joint with"....how, precisely, would the OP go about identifying these people?

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

#120

Post by frombody »

c1c2c3 wrote: post #16

Personally I hate monthly payments for things. If it is something I'm going to use I may as well get a bit of a discount and not have yet another payment coming out of my account each month. Additionally I'm in the UK, so this won't apply everywhere. Some (Many?) bank accounts charge a flat fee on top of the currency conversion rate - again a reason to make just one payment a year.

I am another person that also avoids all monthly payments. Even yearly payments I always disable any recurring fees immediately after sign-up.

I will decide when money comes out of my bank account, how much I am willing to pay, and whether your product is worth the money.. not you. And I'd rather not spend time and energy doing this monthly.

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