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Subscription Businesses Should Reduce Friction Even When It Comes To Cancel... PowerPoint PPT Presentation


Subscription businesses should ensure frictionless cancelation method to avoid chargebacks, unpleasant business comments and incorrect business forecasts. Adding friction to the cancelation can bring your business a whole host of issues.Read our Best Practices on Subscription Billing business: https://www.vindicia.com/resources/best-practices

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Subscription businesses should reduce friction even when it comes to cancelling

Subscription

businesses should

reduce friction

even when it

comes to

cancelling

© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

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Subscription businesses should reduce friction even when it comes to cancelling

Subscription Businesses Should Reduce Friction

Even When It Comes To Cancelling

Everyone has their own horror story about dealing with cable television, and it seems

these complaints will never go away. Consider what happened when one major company

failed to completely cancel service for a man in San Diego. According to the local NBC

affiliate, Sandy Golden, daughter of an 87-year-old San Diego resident, noticed Time

Warner Cable had charged her father for television despite the fact that he'd canceled his

subscription a year prior. The pair might not have even noticed the discrepancy had it not

been for the fact that Golden's father wanted to move his TV. When Golden called Time

Warner, a representative said her father's house didn't have that particular service.

Ultimately, Golden had to call the company 25 times. Through the process, she learned

her father had canceled Time Warner's TV service but continued to use the company for

phone and internet. However, he was still being charged for television. Despite Time

Warner staff admitting to the mistake, the company didn't refund the payments it received

right away. It was only after Golden contacted NBC 7 that the company attempted to right

its wrongs by offering a $1,200 refund.

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© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.


Subscription businesses should reduce friction even when it comes to cancelling

It took Golden multiple phone calls to determine her father had been overcharged for a

year of service.

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© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.


Subscription businesses should reduce friction even when it comes to cancelling

Friction and cancelations

It shouldn't take a news agency to convince a cable company to provide good customer

service. What Time Warner should have done was ensure Golden's father's billing

information was completely erased from its databases and his name taken off the

company's list of customers to bill.

From poor customer service to skyrocketing prices, it's no wonder many people are

cancelling their cable subscriptions. As the LA Times reported, estimates from research

firm SNL Kagan found cable TV lost 812,000 subscribers during the second quarter of

2016. A drop in subscriptions isn't unusual during this time, as students generally cancel

cable services at the end of the school year. However, the total number of cancelations

has steadily increased over time.

"It is a bit of an acceleration and the biggest quarterly loss that we've seen," Ian

Olgeirson, an analyst with the firm, told the publication. "We are seeing a gradual

increase in the decline rate.”

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© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.


Subscription businesses should reduce friction even when it comes to cancelling

"Cancelation are a

natural part of any

company that operates

on a subscription

business model."

While much has been said about the increasing

number of people who are cutting the pay TV cord,

cancelations are a natural part of any company that

operates on a subscription business model. Businesses

can and should take measures to keep their churn rate

as low as possible, but they must also accept that there

will always be a portion of customers who want to

leave. It's important that these companies treat

customers respectfully and honor their wishes by

making the process swift and easy.

One goal of subscriptions is to reduce friction for the customer. It's easy to see this

concept from the payments side. Customers provide their card or bank information, and

a recurring billing service charges them automatically. But when it comes to

cancelations, it's easy to make the process complicated. Some businesses require

multiple steps while others have a grace period between the time a customer cancels

and when the request is finalized.

By introducing friction into the cancelation process, businesses create unsatisfied

customers. These individuals are more likely to make negative comments which can

impact a company's public standing. In addition, charging customers after they cancel,

even accidentally, increases the risk of chargebacks. Customers will see the charges on

their billing statements and call their bank to dispute them.

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© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.


Subscription businesses should reduce friction even when it comes to cancelling

In addition, charging customers after they cancel can interfere with reporting and

decision-making processes. Businesses will factor in these incorrect charges and

overestimate metrics like profit forecasts and average revenue per user.

No business wants to see its customers leave, but allowing them to do so easily is far

better than forcing them to stay.

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© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.


Subscription businesses should reduce friction even when it comes to cancelling

About the Author: Kevin Cancilla

Kevin Cancilla is Sr. Director of Marketing at Vindicia. He is

responsible for corporate communications, outbound product

marketing, demand generation, sales enablement, website and

content development, and partner marketing. Kevin is an

industry veteran with over 20 years experience in strategic

marketing and product management for enterprise software

companies such as STEALTHbits Technologies, Tripwire,

Epicor, Netcentives, Calico Commerce, Baan, and Adobe

Systems. He holds a BSBM degree in Marketing and Business

Management from the University of Phoenix.

Visit our Blog for more information.

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© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.


Subscription businesses should reduce friction even when it comes to cancelling

Thank You

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© 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

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