What do you guys think of this offer?

Would you be willing to pre-pay for one year if you could cancel at any time and get your money back for the unused months?

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$9.99/month => $119.99/year

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No one wants to pay a year up front

Sounds like it...and I know how it is to be on the wrong end of the deal. :)

But even if you could get your money back for the unused months? For example, if you pre-pay for 12 months, but decide to cancel after 2 months, you'd get $100 credited back to your credit card...

Of course that's presuming Company X is going to stick to the deal and actually pay you back. Also, you might be perfectly happy with their services, only to see them disappear in 5 months time... That's still 7 months to go, with no money back and no refund.

It would be nice if people could pay for a year and have a 100% guarantee they wouldn't need anything like the above. The truth is the net ain't like that a lot of the time. If hosts themselves recommend people pay per month, or three months at a time tops, I think it's going to say something

Greg Moore

I might pay one year pre-pay if the hosting company is trustworthy but I wouldn't pay pre-pay for a company I have no idea about.

Originally posted by klisis
I might pay one year pre-pay if the hosting company is trustworthy but I wouldn't pay pre-pay for a company I have no idea about. Yeah, I agree. For a startup or a new company I know nothing about, it'd be a hard sell. Hosting is a pretty unstable industry right now, and there's no telling which companies will be around in a year. On top of that, the business plan of a company that's taking that approach seems especially shaky: if they don't sustain signups, they have no sustaining income.

I might do it for an established and reputable company, but even then it would have to represent a considerable savings over what I'd pay (there or elsewhere) monthly or quarterly. Otherwise, why tie up the cash?

Originally posted by Synergy
No one wants to pay a year up front

That statement is just so not true. About 40% of our clients pay for a year up front with us.

For starters if charging annually you will have an incredibly hard time getting a decent merchant account due to the liability involved. The reason for this is that if someone has an annual account they would be able to due a charge back a year after the service if they wanted to and get back there money :( Most merchant accounts do not like annual pricing and compound that to Internet Web Hosting you will have a tuff time.

Know if you do mostly monthly payments and have some annually I think you will be ok, but if just doing or doing most of them annually you might have a hard time. But that is something you would need to discuss with your merchant account processor.

Food for thought...

-BW

Originally posted by BW
For starters if charging annually you will have an incredibly hard time getting a decent merchant account due to the liability involved.

Yeah, I found that out after I started looking into merchant accounts. But luckily, I've been able to find a payment processing service (here in Canada...about 5 mins from my house, in fact! :) ) that will allow me to charge annually and also will not charge anything for refunds/credits. The discount rate is a little high at 3.95%, but overall it's a decent value.

I have to go with KDAWebServices on this one. more of our customers go with a year then any thing else. We use to do Month to Month but found 3 problems.

1. Customers see a charge 4 months latter and some time forget who that name is. Only seen this happen 2 or 3 times.

2. They don't want to deal with month to month most like to pay and get it over with.

3. You will still get chage backs month to month or year.

We have had 3 this month but all from over seas so everone know how they go 90% of the time. :)


But if you are going to do plans for a year give them the option to do at the least 3 months 6 months and a year works best. Make the year per month cheaper over all if they per pay. Works for us and customers like it.

Originally posted by Vortech
I have to go with KDAWebServices on this one. more of our customers go with a year then any thing else. We use to do Month to Month but found 3 problems.


Is it more true for your smaller account than for the others? The incentive to pay yearly for that plan is pretty high -- price reduction by almost 50% ($15 vs. $8 for those who haven't visited the site).

Have you seen much of a change in the number of sign-ups after removing the month-to-month payment option?

Not at all. It got better once i did. We get 20 to 30 new Low End signups a day. That is on our LiteWeb Plan. Our corp and pro and ecomm plans are only about 5 to 10 a day. We were smaller when i did have month to month and did not have banners at findahost and all the other hosting dir. so that also helps.

But over all i have to say much better since we went 3 months 6 months and year plans. We will do a month trial for free for new users but they have to call in and just pay for the one month to try it out then go to one of the other plans like 3,6 or 12 months but we don't do that much as most just signup right on line.

I often go with 3 or 6 month pre paid services but not one year pre-paid.

I am like you i would only do 3 or 6 months at time i don't the year thing my self. But our customers seem to for some reason. I think the best thing is to offer them at lest 3 ways that way you don't lose some one if you only have a year. :)

After 3 or 6 months pre-paid expires, I would go for a year pre-paid. (Since I know how trustworthy the company is during the 3 or 6 months)

I have to also agree with KDA. For out low-end $4.95 account close to 80% of the signups are annual.

On the other hand, only about 15% of our customers signup with an annual contract for the other plans. Altohugh we are finding more and more opt for the 3-month plan.

Our prepaid 1 year plan is probably the most popular plan among our customers. Surprisingly, most of them order the plan without having used our services in the past.

However, like klisis and Vortech, this is not something I would do myself.

Absolutely. In fact, we have a plan that is only 1 year for $50. We get a lot of takers on that plan.

On our other plans, people like to pay yearly for the discount. They are familiar with our services so they feel comfortable about the company.

We actually have a fair few people on our top two plans that pay for 1 year in advance, but most of the yearly customers are on the lower plans.

At such low prices, your risk is very small. Might lose $50 bucks or so. I bet lots of folks would take that risk and not be bothered with a monthly payment. But they would have to be confident that you'll be around in a year.

On the other side of the coin, I've been hosting since last July and I'm not wild about billing people every month when I could do it once a year.
Charles.

Yearly fees are a godsend for hosts as they reduce transaction fees by a great deal. Using Revecom we get charged $1 a transaction so a yearly account saves us $11 over a monthly account right there. Also as a yearly payment we recieve more at once for generally pass those savings back to the customer. (hosts in general) If every account that signed up with us was happy to pay a year in advance we'd be very happy indeed. The reality of it is, when you pick a host to use, you're trusting that host to give you a quality service for that year and not just *do a davey* and run with the money.

We suggest monthly billing for a customer peace of mind issue rather than anything else. Klisis makes a good point of trying a host for a month to three months, and then if you're happy with what you get, then sign up for a year. There's a lot of great hosts out there, but there's a lot of sharks as well...

Greg Moore

Very true Greg there is to many sharks out there. The bad thing is it make it hard at times for us good host. But the good all ways wins out.. :)

BTW. Greg what FAQ script do you use i really like that one. Do you know if it would work on NT or not. Does it use mySQL for Flat text file to store data.