For those of you that offer different discounts for users who pay Yearly, Quarterly or Monthly, what is the percentage that does each? If you have 10 users, how is it broken down?

For that matter, is it important to have pricing options like this?

Thanks!

Most of mine pay monthly by using a PayPal Subscription (recurring) payment.

When we started, we have 30, 90, 180 and 360 payment options. The 90 day payment option was with a 10% discount. The 180 day came with a 15% discount and the 360 day accounts came with a 20% discount.

The problem was when folks wanted to upgrade their accounts. There was messing around with their recurring payment etc. Hence we ditched those payment options and just went with the 30 day accounts. It keeps your cashflow in real-time with your costs as most of your costs are also monthly based.

Most of our customers choose yearly billing, followed by quarterly, monthly, and last by every 6 months.

Most of our customers pay on yearly basis. We also suggest to go for annual payment system.

Hosting is more yearly than monthly. Which is why reseller plans are ALL monthly and the only way to pay yearly is just send a paypal or a check which I have had a few do but not many.

I agree with Aussie bob, for the reason he states and one other: chargebacks.

Pay for a year, use 5 months, charge back. Had this happen twice now. It'd be a lot harder to pay for a month, and then another and another and another and then after 5 months say "I didn't get the service I paid for so I want to charge back 5 payments" surely (and I'm guessing here) even the most brain dead cc company would be like "so why'd you keep paying for 5 months then?!?!?!?"

I am seriously considering doing away with yearly payments starting on the new year.

Originally posted by machineman
For those of you that offer different discounts for users who pay Yearly, Quarterly or Monthly, what is the percentage that does each? If you have 10 users, how is it broken down?

For that matter, is it important to have pricing options like this?

Thanks!

at least 2 or three pay the yearly fee
the rest are paying monthly/quarterly

So does anyone here think it may be best to offer discounts for signing six month or yearly contracts (10% and 20% maybe) and continuing to bill monthly?

This also offers more protection because if you have the customers signature on a contract then it is pretty close to impossible for them to initiate a chargeback. Unless you didn't deliver the service of course.

I would keep it monthly,
for many many reasons..

Paying back for downtime,
charge back,
your payment schedule to your providor is most likely monthly,
adding overage to that month,
etc.etc...

Hosting period works better on a monthly basis i think,

Contracts generally place on thought in someones mind in my opinion:

SCAM!
or
Oh, some how im going to get screwed by this contract.


Tell your customers you dont require a contract they get a warm fuzzy feeling,,

Tell them you do and they get suspicious!

Go monthly, no contract, pay your debt monthly.....

Only monthly and quarterly payments accepted. If a customer wants to pay yearly I tell them in a very polite way that they are dumb screwups :D

DO - NOT - PAY -YEARLY !
Just don't ok?
No really
It's not smart
You don't wanna do that
Trust me
And if you don't trust me, read these forums
It's true
And you can quote me on that!

definitely monthly - IMHO I think it is best for everyone

I understand the reason why everyone says monthly, but dosen't monthly end up costing more money? I mean with a system such as revecom or 2checkout, if you charge monthly, then you have to pay the transaction fee 11 more times than if you had charged yearly?

What I'm trying to figure out is if it's only a $5.00 per month plan, how can you make money doing this?

TinmaN

I'm only being charged a % of the amount I receive. No fixed amount. So it doesn't matter.

Most definetely, the monthly is the safest and most profitable way to go. You probably have server rent, colo or dedicated line fees on a monthly basis, so seeing that cash come in at the end of each month makes figuring out what your profit is a lot easier. Not to mention, if you have sales of $5000/mo it makes your books look better vs seeing a month of $2000, a month of $8000, a month of $3000 and so on. Believe me, it makes getting a loan or any other finiancials a lot easier ;)

Eric