I am getting a merchant account from echo and was notified that at least in the first 6 months, I can only offer my hosting plans on a monthly basis.

My question is how important do you think it is to give your customers the opportunity to pay quarterly, semi-annually and annually for a hosting plan?

Thanks in advance for all input.

Jeff

I think annually is important. More people than you think like to pay up for a whole year.

Although I would personally never pay annually for a service such as hosting, I find a good many customers like quarterly or annually. So, like anything else, by not offering options, you may lose some potential customers, although not necessarily a significant amount. An alternative is always to use a third party processor to handle quarterly and/or annual payments.

On the other hand, let me caution you that annual payments can trick you into cash flow disaster by deceiving you into thinking your early cash flow is really good until you have to provide services for 11 months with no revenues. Be careful.

I think you should strive to offer monthly, quarterly and annually. 80% of my signups choose annual billing. I think that is because there is a slight price break I offer for annual billing, and also because its more convenient for the customer.

Ditto to what Incognito said. Becareful about cash flow. There are ebs and flows in the business, and you need to take that into account.

The other problem is if something happens to you so that you can't possibly run the business, who can take care of it when you can't. My wife's biggest concern was having to provide services for 10-11 months while not being able to maintain the business or take on new customers.

My short-term plan is to cache money ahead to eliminate the "service without pay" concern. I'm set now for 6-8 months without renewals or new signups. I'll keep slipping some away until I have a separate account with 12'mos data center fees set aside.

Regarding the support issue, I've "almost" decided to take out a third party support contract with someone like "bobcares" to address the support concerns.

No one plans to get into trouble, but you never know when your ticket may get pulled, and leaving an un-supportable business to your loved ones (even a profitable one) may not be their idea of a good inheritance.

Bob

PS: Check with your processor, to see if you can offer quarterly/annual billing IF you offer a 30day money back guarrentee?

PPS: One problem I've found with annual billing, is folks forget to keep their contact information up to date. I use authorizenet's weblink (soon to use sim) interface and never see a full credit card number. My charge-backs are real low because the customer must initiate the charge for each renewal.

After 12 months, some self sufficient clients are still with you but with NO current contact information. You have to surf their pages to get current e-mail addresses.

Charging people monthly is good for people to actually wants to try your business and ppl will choose yearly if they heard feedback about your company...*positive* one ofcourse...

If you are charging ppl monthly...they will more likely love it if you say *lock price for life* stay that price forever...

but yearly...you can do so as well..to persuade them to continue their plan another year...

Both Monthly and Yearly has their own benefits....
so up to you...

but I choose monthly..because my company will collaspe soon or later... if no customers~

I dont think this is important, We stopped offering bi annual,annual and semi annual orders about 4 months back and we have not lost any customers, If customers have the trust in your company to purchase on a yearly basis then i dont see why they wouldnt pay on a monthly basis, But thats just my opinion.