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  1. #1
    Join Date
    Apr 2004
    Posts
    295

    Does yearly payment turn customers off ?

    My prices are pretty low so I charge yearly. However it seems like on Google I'm attracting visitors with my low monthly prices but when they see that I charge them yearly they do not submit the order. Do you think with monthly payment I got more customers ?

  2. #2
    Join Date
    Mar 2003
    Location
    United States
    Posts
    3,675
    I would think so.

    Most people at least like to try out a service before they jump right into things. From experience, many like to pay monthly (and I personally recommend it) because if things get sour then the client can pull out without much hassle - vs. an issue over some 8 months worth of payment that could lead to some problems.

  3. #3
    Join Date
    Apr 2004
    Posts
    295
    Well personally I wouldn't pay yearly either. I think for a week I will try another price model with monthly payment and then I will see if it works better for me...

  4. #4

    Re: Does yearly payment turn customers off ?

    Originally posted by taketo
    My prices are pretty low so I charge yearly. However it seems like on Google I'm attracting visitors with my low monthly prices but when they see that I charge them yearly they do not submit the order. Do you think with monthly payment I got more customers ?
    Yes, you definetely will. However, you probably won't keep them as long. Those who have the money to pay a year in advance, in my experience, tend to be the better clients as far as loyalty & support issues.

    Even if you do decide to offer monthly payments, you would be wise to continue to offer longer term payment options. We have many clients who find paying an invoice every month a hassle and prefer to pay in advance to avoid that.

  5. #5
    I think yearly hosting customers are harder to keep. Yearly customers have a much lower renewal rates. About 3/5th of my customers pay monthly, and 2/5th pay yearly. Overall, I prefer monthly customers. Our monthly renewal rate is about 99% while yearly renewal is at about 75%-80%.
    Great Hosting Companies for Great Businesses

  6. #6
    Join Date
    Aug 2003
    Location
    Pittsburgh
    Posts
    3,479
    I agree with Asci in that you should offer both monthly- and long-term payment options. Even though it seems stupid to you to pay a few dollars a month as opposed to a few Jacksons, but like others have said: trying out a host is often a prerequisite for purchasing a long-term service.

    I also agree that long-term clients will most likely be less of a hassle.

  7. #7
    Join Date
    May 2002
    Location
    Florida Panhandle
    Posts
    1,975
    Most of my yearly customers were using stolen CC's, I am very suspiscious over most yearly orders.
    Nationhosts, LLC
    http://www.nationhosts.com
    "Nationwide hosting solutions"

  8. #8
    Join Date
    Feb 2002
    Location
    Australia
    Posts
    24,009

    Re: Does yearly payment turn customers off ?

    Originally posted by taketo
    My prices are pretty low so I charge yearly . . .
    Common place with a lot of hosting suppliers, where they have to pretty much charge yearly, because they can't charge $2/mth by the month.
    AussieHost.com Aussie Bob, host since 2001
    Host Multiple Domains on Fast Australian Servers!!

  9. #9
    Join Date
    Jun 2003
    Location
    the colony, tx
    Posts
    37
    depends on how low your prices are. If you are charging $3 a month, it doesn't make sense to have to deal with monthly charges on the credit cards or from the merchant account.


    robert
    Be Your Own AOL-FREE
    http://cyberosis.net/byoisp3.html

  10. #10
    Originally posted by NationHosts
    Most of my yearly customers were using stolen CC's, I am very suspiscious over most yearly orders.
    I can only relate. We have seen a large uprise in fraud when working with yearly customers.

  11. #11
    Join Date
    Feb 2004
    Location
    New Zealand
    Posts
    1,202
    Well , we offer a yearly plan ; its fairly cheap and people like it so far.
    DigitalGoods.info
    FREE Shared, Mega Resellers + Dedicated Servers

  12. #12
    Join Date
    Mar 2004
    Posts
    1,301
    people would like to checkout your service before deciding to stick around with you for the rest of the year, hosting expense is not like domain. Offer two types of payments semi-annually and annually. Offer some incentive with the yearly price, maybe 13th month free. try to entice them into it, mostly hosts to that by giving a 15% discount on the annual price. Trial and error method would help you seek what works best for you.

  13. #13
    Join Date
    Aug 2002
    Location
    Seattle
    Posts
    5,512
    Customers are generally worried that you'll go out of business shortly after making payment or that they'll need to move out before the 12th month.

  14. #14
    Join Date
    Dec 2003
    Location
    Christchurch, New Zealand
    Posts
    100
    We offer monthly, bi annual and annual payment options. With discounts for advanced payment.

    We get a fairly even mix of customers some want to dive straight in and pay for a year, others want to pay for as little as possible.

    In our case the people that want to dive in generally, know about our business or have heard good things. The people who want to pay monthly are either tight wads or cautious.

    Best bet is to let people choose their payment term, or at least give them the option once they are satisfied to pay for a longer term.

    And finally, remember if people pay for 12 months or whatever in advance you are liable to provide them that service for 12 months. In other words, long, long after that money is spent, you owe em.

  15. #15
    Greetings:

    We present our customers with several payment terms including yearly.

    Generally the yearly signups are either renewals from a shorter payment term seeking the best deal price wise, or they are referrals from existing customers.

    Thank you.
    ---
    Peter M. Abraham
    LinkedIn Profile

  16. #16
    Join Date
    Jan 2004
    Location
    Singapore
    Posts
    1,032
    Well it would depend on the amount paid....

    eg.
    If below $5 I would suggest Yearly
    Below $20 Half yearly
    Above $20 Monthly

    Charging like $5 every month over your merchant account could make you lose more month than you make.....
    -=- GQ Hong -=-
    GalacNet WebMaster

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