It’s 2018, and people want things faster, simpler, and indefinitely.
One cannot argue that the internet has made everything easier. Most transactions now take place over the internet via apps and smartphone devices in a matter of minutes, be it grocery shopping, clothes shopping, video streaming, dating sites, anything. And people eagerly sign up to these websites, paying a small subscription fee, having been persuaded that it will simplify their ordering and that they will reap the benefits. Welcome to the age of Netflix.
These are the three magic words that fill a consumer with confidence, with reassurance. It’s safe for them to make a one-off payment, to test a service, as long as they have the ability to cancel straight away if necessary.
Like Netflix, we offer very attractive services (for those in our industry, trading in forex, futures, equities, and the like), but unlike Netflix, these services are costly. This is due to the fact that there is a lot of confidential data needing to be hosted and transferred, in a time-sensitive manner with highly consequential outcomes. This incurs a lot of risk for potential customers who are considering hosting with us:
This is why clients are attracted by our 30-day commitment scheme. A new client who wants to test our services without shelling out a fortune and locking themselves into a contract, can start off small by purchasing one Dedicated Server to be hosted with us, for example our basic Emerald package at £195 per month. Therefore, they are paying a relatively small amount of money for one month. If they decide it’s too much, or they are not happy with our services, they can cancel within 30 days and they will not be charged for the following month. If they decide they are happy with us, they can begin to grow their setup, taking additional servers and perhaps some connectivity.
This is the process that many of our new clients go through, testing our services with the knowledge that they can cancel at any time, and then going on to scale their purchases with confidence.
It only works with companies that are confident in their services. Being assured in the essence of your business, the quality of your products and your customer service is key in offering a short-period subscription plan. The idea is to show how customer-friendly and flexible you are by pushing the fact that customers can cancel at any time, but therein lies the double-edged sword, the Catch-22: you never want them to cancel the subscription.
Then there’s the rippling effect that cancellations can have on a company’s overall profit. The reality is that sometimes you can be performing well, getting new orders and receiving positive customer feedback, and yet – due to unforeseen external factors beyond your control, such as the deterioration of a customer’s financial situation – there will sometimes be cancellations. In the early days of a business, when subscription numbers are low, this can have a detrimental impact on your financial performance, however as the business grows and the customer numbers start moving into the hundreds and thousands, (provided the customer service levels remain high) you should be able to ride any “cancellation waves”.
Therefore, there are risks to a business when employing a subscription payment plan, and it must be taken into consideration whether the trade-off in being more customer-friendly is worth it. Is the growing recurring revenue from confident and satisfied customers enough to offset any unforeseen “cancellation waves”?
The subscription era has helped to make great strides in facilitating ordering processes, while providing greater assurance to customers. Whether it’s Beeks Financial Cloud, Amazon Prime’s Next Day Delivery, or yes, the trailblazer, Netflix, consumers are subscription-mad and happy to stay that way.