Thursday, September 13, 2018

Why the Try It Free offers can Boomerang back in a Bad Way.

The problem I have with Try it Free offers is, the price of what it will actually cost after the free promotion is over is usually not mentioned. I think this is a mistake for the following reasons.

Try it Free encourages people to try the product for free, and then bail at the last moment so they squeezed every possible bit of value out of the promotion before moving on. Meanwhile the Brand is hoping the customer will forget to end the promotion and get sucked into the vortex of forgetful consumer who keeps renewing because they keep forgetting to end the subscription.

While to some degree most subscriptions will have customers who only signed up to get the free service, some of those customers will forget to cancel the product or service. Should the Brand really rely on forgotten subscriptions going forward as a method for proving growth or popularity?

The "forgot to cancel, just wanted the free initial offer" consumer ends up being angry when they get tapped for money they either did not want to spend, or could not afford to spend. There is a price to pay by the Brand for customers who forget to cancel a service they were not going to keep once the promotion ended.

What really also upsets many free only consumers is just not knowing what the "fail to end subscription" price will be if they forget to cancel their subscription. It's one thing to know that the monthly bill is going to be a specific amount, its quite another to just not know.

The Smarter route to take is to incentivize signing up by giving a month free, and then just stating what the monthly charge will be thereafter. To sweeten the deal, offer a free month at the beginning of each subscription year. Of course not offers can be a free amount of time. Some offers are based on the size of an order, that is a discussion for another day.

If possible one intriguing idea is to get a message onto the consumers credit card or debit card that notifies them this was a free month. Maybe charge 2 cents and state this is your rewards month at the beginning of the program, and then repeat this message one time each year. 

Imagine giving a month free, the customer forgets they are being billed because the billing disappears for one month, then the bill starts up a month later. It might annoy the customer on some level because they may have taken that particular billing out of their monthly budgeting. Actually rewarding and telling the consumer about the reward seems like a better way to go than offer a free month in which no billing related message shows up.

Also key is to not raise prices every year. So from year one to year 2, I would highly advise no price increase. If in year three a price increase is needed, make the information known a few months ahead of time. Might be interesting to use the yearly free month incentive as a way to avoid price increases by eliminating the free month in year three.

There are many clever ways to offer incentives that don't upset consumers, I would recommend always taking that path versus hoping consumers forget they are being billed or don't have the time or patience to cancel.

Visit my LinkedIn page to learn more.

No comments:

Post a Comment