I haven’t seen this mentioned in the conversation yet, so I’ll bring it up here.
A research paper from a few years ago introduced the concept of “customer inertia.” It found that users tend to overestimate their difficulty in unsubscribing from a service. In other words, when a subscription includes auto-renewal (or a similar feature), a significant portion of potential users will choose not to subscribe because they fear they won’t be able to cancel if they stop using the service.
As someone who often doesn't subscribe because I don't want to get NYTed into having to pick up the phone to cancel, no this approach to pricing wouldn't change things for me.
What does work for me is when the service's docs have a very clear page on how to cancel the service without having to talk to someone.
That's really interesting as a concept. As one random person on the internet (not a sample) I definitely avoid services that look like they'll be a pain to unsubscribe from, and will be much more likely to try out a free trial of something if it looks like an easy one to cancel. Super interesting that some people are trying to factor in that things into wider-scale enomics.
Yeah such are race to the bottoms. Because some assholes did turn cancelation into a Kafkaesque nightmare, now people don't want to subscribe in the first place. Who could have seen that coming? Genius MBA logic. And now honest businesses are in the shitter for it.
Seeing how much revenue subscription services make from inactive customers (and how much I have paid over my lifetime to services I no longer used) people don't overestimate this at all. If anything, users still underestimate it.
The disconnect between the researchers and people's actual estimations is that "cancelling a service" is much harder than the couple button clicks it usually takes. You have a structural problem: If you don't use a service, you don't spend a lot of time thinking about it. It's easy to cancel something if you make a conscious decision to stop using something. But if it just gradually falls out of use, your only reminder that you should cancel it are your bank statements or the occasional payment reminder email (that some services avoid sending for exactly this reason).
A research paper from a few years ago introduced the concept of “customer inertia.” It found that users tend to overestimate their difficulty in unsubscribing from a service. In other words, when a subscription includes auto-renewal (or a similar feature), a significant portion of potential users will choose not to subscribe because they fear they won’t be able to cancel if they stop using the service.
According to the study, this affected about 30% of users. So, could offering something like fair pricing reduce this barrier and increase new subscriptions by 30%? https://bfi.uchicago.edu/insight/finding/sophisticated-consu...