Cloud Software Pricing* and the *fine print

Eric Greenspan Practice Development Leave a Comment

You know what I mean right? When you see $55/mo for a new app you want to try. You sign up for the 14 day trial. Then, you fall in love. When it’s time to buy, you get billed on your card for $75. You don’t notice for a month. Then, it happens again. This time, you start to question it. You email the company, because they don’t offer phone support. You get a ticketed response from their Zendesk enabled support system and then you get an answer. You are told, “It’s $55/mo if you pay for a full year in advance or $660. You saw the asterisk, but you didn’t think to check it out. The $55/mo was the only thing prominent and you just assumed if they would put that in the pricing page, then that is what it would cost. But it’s based on the assumption you are paying for a year in advance and if you don’t, the price is more. You let it go, because you’ve sunk too much time into this software, but it stings and you can’t forget it.

It’s happening everywhere. It’s called “bait and switch” and it’s generally considered unethical and in some cases, it’s illegal. Now don’t go suing your cloud software maker just yet. They cover their you know what really well with plenty of clear language that explains it. It’s usually*

*done like this so you are not likely to read it. The “fine print” has notoriously been the way companies have achieved sales over the years and this is just one of the tricks they use to lure you in and keep you from knowing all the details.

Costco won’t allow you to use “fine print.” I don’t use “fine print.” But many do and I can practically guarantee you that you didn’t read it when you bought your last car.

The other day I signed up for Ringcentral. They have this mastered. They offer a per user monthly price with a $5 trial but it’s not all it appears. Go ahead and try it and you’ll quickly learn that the $5 trial is for more than a single user. Now why would I want a trial with more than a single user if it’s merely a trial? Read further and you’ll learn that the price is for 2 or more users, if you pay for an entire year, but if you agree to a one year contract, they give you a discount and just when you are ready to sign, you learn there are fees and additional costs per month. In my case, $34.99/mo per user, which is exactly what it said on the pricing page is $62/mo and that’s with the signed contract for one year. If you see their pricing page, you’ll see two little numbers in superscript that lead to the “fine print.” I bought it because I wanted it but I hate the feeling I have inside. This company is not friendly to me now. They are just necessary. Soon, they will be a commodity like the rest and I will remember this tactic and leave in haste.

Then, there’s the $24/mo for 6 months trick and after you sign up it becomes $49/mo on month 7. This one reminds me of the cable companies who offer discounts that mysteriously disappear without notice. They mail you a promotional offer for a new service weekly, but you get nothing when your discount expires.

Then, there are a few companies that need to be mentioned for goodness. Olark for one, is true to their pricing model. You pay what you think and they do what they promise. No tricks, no concerning fine print. They even send you an email before your monthly renewal hits to basically say, “Each month you are recommitting yourself to us and we are letting you know we appreciate it.” Or, maybe they are saying, “If you still need us, you’ll be charged again but you can cancel if you wish.”

Not many offer a cancel anytime policy and actually mean it. I don’t need prorated refunds, but I do in fact expect it to happen. The YMCA charged us for our monthly subscription last month after we cancelled. Apparently, we had to come in to the YMCA to cancel. The email we sent which went unanswered for a couple weeks was not sufficient. Yet, we can buy camps and other services over a single email. But to cancel, we have to come in. So we did. Then, we got charged again because the fine print said we had to give 30 days notice. Missed that one.

I run and we have a flat $25/mo rate for Full Access. If you buy annually, you get two free months or $250 for the year. Now, if we played the game outlined above, we’d put $20.83333333333333/mo* in our pricing table and the asterisk would read *$25/mo if paid annually. WE DON’T DO THIS.

Subscription software and other services are becoming the norm. Great products and services, at reasonable prices, are available to us, and we love them. But read the fine print and consider the way a company does business, before you do business with them. Also, add all the subscriptions up you currently pay, you know, even the iCloud, Spotify and that monthly discount car wash deal you got long ago, and you’ll see they amount to a bit more than you might think.

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