What is better solution for costumers:
annually or monthly payment period ???

What is your preferability ?

TNX

Most want monthly, some want annually with a discount.

I prefer monthly both as a host and as a customer.

I see no reason why a host would collect yearly payments. If they need the money to keep paying for the servers then they'll go under fast (Cyberwings)

Monthly payments keep you sharp. You have to battle for keeping the customer month after month. Which is a good thing for both the customer and the company!

Major drawback: spending too much of my daily time with expiring and declined creditcards. For crying out loud, UPDATE the ****** information on time people !!!! (sorry, frustrations :D )

This may be better answered in the another forum, try "Running a Web Hosting Biz ".

Definately monthly, both as a host and as a consumer. My bills come monthly, not yearly. Hosts that primarily deal in yearly sales are counting on sales momentum to pay the bills and that can be risky for all involved.

IMO, paying annually is advantageous to both the host and the consumer.

if you are unsure of the company, ask them if you can start paying monthly and then switch to quarterly or annually once you feel comfortable with them...

...if they require you to pay yearly, stay away :)

Originally posted by akash
IMO, paying annually is advantageous to both the host and the consumer

Why?

Just to add: I definitely preferred monthly as a host. But some clients (5%?) specifically requested to pay annually. Half wanted a discount, half never asked, just paid the full amount upfront.

Who knows why? I never asked...

Originally posted by Pilgrim


Why?

consumers can get huge discounts and hosts can get funds right away...

Most clients prefer monthly payments because of the size of them. But, if you offer a decent discount on yearly, many will choose that. It's just nice for them to have a choice.

Monthly would be the safest way to go for a customer, but if they feel the company is good, annual is a better choice to save some money :)

It's the getting funds right away part that scares me.

In one of the other forums a new webhoster posted a question about how to get more customers. He has prepaid 2 months for a dedicated server and now has one client and will probably get another client soon that will pay 6 months in advance. With this payment he can pay the third month of dedicated server rent.

Euh.. now what happens in month 4?

Which brings me back to the original question: WHY would it be an advantage to the host to get the funds right away unless they are in a bad financial state?

consumers can get huge discounts: as a consumer this would worry me also. Why is the webhost so keen on having me pay annualy that he is prepared to give me a huge discount (seen up to 50% discount in WHT ads forums). Again I would question the financial state of this host and wonder if they'll be in business the full year that I paid for.

which is why you should also review a hosts cancellation policy and TOS....customers should make sure they can get their money back if they decide to cancel..

as for getting funds right away, i dont see anything wrong with it...prepaid cell phones, prepaid calling cards, gift cards...they all work on the same principle.

You guys are generalising. Why not allow customers to choose what circle they want to be billed monthly or yearly? In my order form I have 1 month, 3 months, 6 months and 12 months billing periods so customers can choose whatever they want. Most choose 1 month but some prefer to pay for full year at one.

eric: same thing i've been wanting to say, just didnt' know how tot say it :)

the customer should never be forced into paying for a year :)

Originally posted by akash
the customer should never be forced into paying for a year :)

Ok, now we agree :)

To be fair, about 1% of my customers pays yearly as well. I tried my very best to talk them out of it but they incisted. And... well they ARE customers :(

I really don't like it though but over time I've changed my opinion on so many things webhosting related that who knows...

Maybe one year from now you'll find me in the ads forums selling $ 20.- a year sites, yearly payments only :D

i must be doing something weird.....I've actually got about 1/5 customers prepaying....

a) it's not an option on the payment form

b) it's not mentioned anywhere on my site that it IS an option

c) I can be VERY persuasive if they DO ask for it.

d) No discounts are given. If a, b and c fail and they want to pay for a year then it's just 12xmonthly price.

It's very rare though that anybody asks for it. I think option a stops 99%.

Maybe they just don't sign up because it is not an option? Dunno. Would have to do some market research on that ;)

As a customer, I prefer annually. It's cheaper and a bit less hassle.

I've made mistakes of course, but at this point I look carefully before signing up. If I'm not confidence enough to pay for a year, I shouldn't consider the host in the first place.

Originally posted by Gordo
As a customer, I prefer annually. It's cheaper and a bit less hassle.

I've made mistakes of course, but at this point I look carefully before signing up. If I'm not confidence enough to pay for a year, I shouldn't consider the host in the first place.

one very brave soul.....

i still dont use my credit card online...i've got one of those internet secure cc numberes, where it changes each time you use it...

Originally posted by Pilgrim
. . . . . . . . .

Maybe they just don't sign up because it is not an option? Dunno. Would have to do some market research on that ;) Just off the top of my head, I'm thinking that's probably it.

Dang, missed out on another possible customer :(

Anyway...

I just realized some hosts have to pay a fixed rate per cc transaction so that could be a reason why they offer discounts on yearly payments. I only pay a % of the collected amount so that's also another reason why I am not too much leaning towards yearly payments and not giving discounts. If for example I collect 12 times$ 10 or 1x $ 120 I pay the same amount in transaction fees. There really is no added benefit to me.

As for the hassle... well it's all being done automatic (unless the card is cancelled and the information not updated with us *grmbl*)

:edit: whoops, just hit me.. What about creditcard fraud. I never get any fraud orders on the lower amounts (monthly) but I'm hit by fraudsters signing up for the high end plans multiple times a day. Somehow I have this feeling that the number of fraud sign ups will increase dramatically if the maximum amount they can fraud on also increases.

"Hi, this is Martin from wbws webhosting. I received your order for hosting your site xxx.com and just wanted to confirm your order"

"hosting? what is hosting?"

(acutall phone conversations I seem to be having too often these days)

As a buyer of web space and reseller accounts.

I prefer quarterly payments when possible. It usually means the setup fee is waived if there is one on the monthly plan.

If I encounter problems, I have time to switch without time pressure and money invested.

Give the customer a choice. Paying annually reduces costs for the hosting company.

- Only pay one transaction fee as opposed to 12
- Don’t have to worry about expiration dates expiring throughout the term
- Collect interest on all the money throughout the year

We use the following policy if a customer decides to cancel within the year period:

Pricing on the 3 month, 6 month, and annual service terms are based on fulfilling the entire contract. If you choose to cancel your service prior to the completion of the service term, you will be billed the month-to-month fee for the number of months you have already used the service.

Originally posted by WEBforWEB
What is better solution for costumers:
annually or monthly payment period ???

What is your preferability ?

TNX

Monthly and Quarterly

monthly!!!

Personally, I wouldn't pay annually until I've hosted with a company for a year or two. Even if they offered a 2 months free or something...companies go down too quickly....

The ratio for us would be 50:50 on montlhy and annual payments.

I guess people like to pay annually because they do not want to bother anymore. Others pay monthly for security.