A friend recently noticed that Verizon TV had added a $14.99/month soccer channel to his bill. He doesn’t watch soccer. The channel had been on his bundled telecom account for six months.
From a marketing perspective, monthly subscriptions are a great business model. People aren’t paying too much per month, but it adds up over the lifetime of their account. And they probably don’t think about how many recurring charges they have until they have to update their credit card info. When I moved in 2009, I realized I had 20+ recurring accounts, ranging from a Netflix DVD subscription to a home security system.
As you’ve noticed when you try to cancel, some companies do their best to lock you in, from contracts to early-termination fees to hard-sell retention departments. When I sold my house in N.J. and called a month before the closing to cancel my my no-longer-under-contract ADT account, the rep said I needed to give 60 days’ notice. I explained to the rep that I’d no longer own the house in 60 days. She canceled my coverage immediately.
In theory, if you provide a good service, you shouldn’t need to trap customers into staying. The recurring subscription model works for everything from software-as-a-service (SaaS) providers like Salesforce.com to companies offering designer handbag rental.
How’d my friend’s story turn out with Verizon TV? After three phone calls and some back and forth, Verizon eventually agreed to credit his account for three months. Lesson? Check your statement every so often to make sure nothing’s fishy.
Have you had a particularly good or bad experience with a subscription service?