Why Making Subscriber Cancellation Hard is Bad for Business

June 21, 2017Diana Lengerson
Building in hand businessmen

Building in hand businessmen

The subscription business model is a type of business-to-consumer relationship where the consumer commits to the continuous and regular purchase of a product or service over a set period of time. It’s not exactly new: as a matter of fact, subscription billing was conceived more than a century ago by the print industry. Newspapers, magazines and other periodicals would offer to deliver the latest issues of their publications to loyal readers on an annual or semi-annual basis. The readers would have to pay up front, but in return they would gain the convenience of having their reading materials delivered to them on time and at a lower price per copy than they’d get on a newsstand.

The concept was soon applied to telephone services, cable TV, Internet service providers and every commodity that the Web has spawned. These days, digital products such as music, videos, software as a service (SaaS), online games and more all operate on monthly subscription arrangements. Even physical products such as groceries, daily meals and even razor blades can be supplied to you through online subscriptions.

Of course, you don’t have to be too business savvy to realize that the subscription model relies heavily on a company’s ability to retain customers for long periods of time to be successful. The lengthier the period that a subscriber pays you, the greater the lifetime value and profits your business gains. It’s not much of a surprise, then, that subscription-based companies will go through great lengths to try and keep you in their yard for as long as they can.

In some cases, however, business strategists try a little too hard to retain their subscribers. Instead of constantly improving their products, services and customer experience programs, they try to take the easier way out by making the cancellation process more difficult for users than it should really be. This may sound like a good idea at the onset, but this tactic never does much good to any company in the long haul. Here’s why:

  • It Frustrates Your Customers Even More

Imagine if you got on the train and planned to get off eight stations from where you boarded. For whatever reason, you decide to get off on the fourth station but the train personnel wouldn’t let you. How would you feel about it?

That’s exactly the feeling that you’ll be giving your subscribers if you try to make them jump through several hoops before they’re able to unsubscribe from your service. Unless you did a major investment up front and you entered a legally binding agreement with a subscriber to begin with, you should give your customers an easy time when they want to end their subscriptions.

Customers who aren’t shown an easy way to the exits will inevitably try to force their way out. That means your customer support channels will be perennially clogged with calls and messages from frustrated customers who demand to be unsubscribed. This limits the ability of your customer service representatives to attend to more important issues that would have prevented other customers from wanting to unsubscribe in the first place.

  1. It Gives You Bad Press – Today’s consumers are much more savvy about making purchasing decisions than ever before. People tend to check a company’s reputation online and look for product and service reviews before they hand over their hard earned money. When a potential customer Googles your company’s name, the last thing you’ll want to happen is for a bad review to pop up.

Giving subscribers a hard time in opting out can compel them to take matters out into the open. It only takes one disgruntled customer to go to websites like Ripoff report, YouTube or Twitter to tell the world about their bad experience with you. Needless to say, this can discourage other people from signing up with you in the first place, contributing to greater losses in the long run.

  • It Blinds You to the Real Issues You Need to Fix

There are several reasons why subscribers to your product or service might want to opt out. Sometimes it’s about your company, sometimes it’s more about the subscriber. Smart business people know that they need to have a solid feel for what causes unsubscribes so they can find a way to mitigate its effects. If you’re trying to prevent unsubscribes by making the process more difficult, it will be harder for you to address the problem’s root cause.

Performing surveys, conducting split tests and recording customer support conversations will yield plenty of clues as to what you can do to increase customer satisfaction. The idea here is to face the facts no matter how uncomfortable they might be and to deal with them head on instead of relying on cheap tactics to improve retention rates.

  • It Makes Marketing and Sales More Difficult

The greatest hindrance to the success of marketing and sales is the perception of risk on the part of the audience. The prospect of losing money, wasting time or not getting your expectations met can raise your level of skepticism towards an offering en route to ultimately declining it.

In relation to point number 2 on this list, hearing about other people not being able to opt out when they want to can make a business look shady to you. As a result, you’ll be less receptive to marketing messages and you’ll be hard to pitch to for a sale even when you show significant interest in an offering.

This can be addressed by eliminating the sensation of risk at its source. Show people that they can opt out easily anytime and they’ll be more willing to listen to what you have to say. Offering an easy way out sends people the implicit message that you’re not hiding anything and that you’re confident that you can live up to the things you promised when you promoted the product. As a result, people will tend to trust you more easily, giving you an easier path to customer acquisition.

  • It Opens You to Legal Challenges

In extreme cases, people may even sue your business if you frustrate them enough with difficult opt-out processes and unhelpful customer service routines. Needless to say, this produces even more bad press for you and fighting a court battle can be very costly. Ultimately, keeping a few dissatisfied customers on board is not worth the trouble of f being dragged into a legal proceeding.

At the end of the day, letting people get out of a subscription without any hassles is the ethical and sensible thing for any business to do. In the same way that you don’t want disgruntled employees working for you for the long haul, it’s also not healthy to continue charging a few unhappy customers for the sake of a few extra dollars. Do what’s best for your customers and good things will follow for your business.

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