How to Keep Track of your Subscriptions?
Finance Monthly hears from Gabe Alves, the Founder of TrackMySubs – a company that helps Entrepreneurs and small/medium business have an edge in the subscription economy. What are your thoughts on the subscription economy? The subscription economy is an amazing way of providing and accessing products and services. There is absolutely no doubt about […]
Finance Monthly hears from Gabe Alves, the Founder of TrackMySubs – a company that helps Entrepreneurs and small/medium business have an edge in the subscription economy.
What are your thoughts on the subscription economy?
The subscription economy is an amazing way of providing and accessing products and services. There is absolutely no doubt about the advantages of this new way of “renting” things rather than owning. The ability for customers to turn services on and off without large capital expenditure is revolutionary, and likewise, for companies to generate recurring revenue streams is such a boon for their business success.
It’s truly an amazing time we live in and I get excited about the next idea that someone comes up with that you can subscribe to.
What are the key subscription challenges that people face in today’s world? Why is subscription economy unfair to the customer?
The major challenge we face is that we’re all hardwired to own things. It is how we’ve always bought goods and services. We know the price of an item or a service, we pay for it. Done. Never pay again unless you want another item, or the service again.
In the traditional world of buying things, we never have to think about the implications of not using a product or service in terms of additional money. The example I like to use is an exercise bike – if you buy it and then after the first month you stop using it, you just have to deal with feeling guilty for not following through with your exercise. Besides, you can always get back into the routine next week. It won’t cost you more money though.
The subscription world is different. This is not a once off charge. There is that monthly or yearly cost that will keep on coming unless we take a deliberate action to stop it. In the exercise example, you still pay for every month you put off your exercise. You may not want to stop the payments because you might use it – so you keep on paying.
It’s even harder for a software subscription because you cannot physically see it to remind you. If you aren’t using the software, you can literally keep paying for it for months or years just because you forgot to stop the payments. Unless you crawl through your bank transactions every month.
In the traditional world of buying things, we never have to think about the implications of not using a product or service in terms of additional money. In the new world, we have to be aware of every product and every service all the time. And based on our usage, make decisions – or the default result is to spend more money.
The reason the subscription economy is unfair is because companies now have the upper hand in the transaction. The default position of a subscription is set to “pay again”. The system is set up in such a way that the business wins by customer inaction, whereas in the traditional economy, the business only gets paid by customer action.
It would be a constant burden to customers if they had to authorize the next month’s payment every month. Customers don’t want the hassle of going through this process to keep using the service they want. And this customer behavior is why the auto-subscription exists – because the customer wants it. Add to this the hundreds of millions of dollars being invested in software companies that their sole purpose is to reduce customer churn, increase subscription revenue and upsell. And then take into account the millions of dollars being invested in UI/UX design, leveraging human traits to form addictive applications.
The customer, although they may feel they’re in control, will inevitably lose money in this new world if they’re not organized and disciplined.
What should companies do in regards to better customer care?
I want to say that there is nothing ‘bad’ about wanting to maximize revenue or create addictive applications. As long as it’s done in an ethical way and not taking advantage of the customer.
For example, making the process to unsubscribe from a service into a nightmare of clicks, emails, requests and confirmations so the customer is more likely to keep paying because it’s just so difficult to stop, is completely unethical. Similarly hiding the “unsubscribe” button on an email so you need to be a “Where’s Wally” expert to find it.
One simple thing companies could do is remind customers their payment is coming due. Simple, ethical, but highly likely to prompt users to cancel if they no longer need it. And that will affect revenue, so most companies I suspect will never do this.
How can TrackMySubs help customers with their subscriptions?
TrackMySubs exists to provide customers with the tool to manage in this new subscription economy, removing the “unfairness” surrounding them. Not only does TrackMySubs solve the challenge of not forgetting about what we are subscribed to, but we also cater for all the other aspects like currency conversion, how much we’re really paying per month, and clearly showing when payments are due so there are no surprises.
We all have dozens of subscriptions to all types of cloud-based services to support our businesses. TrackMySubs can help you keep all of these in one organized place.
TrackMySubs was built to solve my own problem and it is now a tool I cannot do without.
PS: The irony of our product being a subscription is not lost on us – a subscription model enables us to be viable. Our position here is not that subscriptions are bad, but they should be provided to the customer in an ethical and transparent manner.