(We know there are many more painful unsubscribes out there - Share yours and we may add it to the list!)
SaaS can quickly go from ‘manageable’ to ‘out of control’.
Just think about all the subscriptions in your personal life: Free trials quickly expire to paid plans, long forgotten subscriptions slip by before you catch them by chance months (years?) later as recurring charges become denizens of your bank statement like a typo on your resume - sitting there for way too long until you catch it by chance. Bank statements are then poured over in frustration (anger) trying to work out why ‘Flip Flopz Ltd’ took £9.99 has been charging you since October 2019.
Seemingly well-meaning SaaS B2B companies are quite good at designing ways to get you in, on board, and active for just enough time to see enough value that you will decide to start, or continue, paying. Once you subscribe and begin deriving value from a subscription, companies know that subscribers will frequently let those subscriptions keep going...even as the value starts to decrease. Or worse, after you no longer even log in.
Don’t get us wrong - we’re big fans of SaaS and have great respect for the companies that have created such amazing products for teams and individuals alike over the years. Heck, Cledara’s entire business is centered around effective management of SaaS applications so we get it.
But in the over 20 years since Salesforce put best of breed SaaS on the map, SaaS growth is still accelerating and all too frequently, some SaaS companies resort to opaque tactics to keep customers paying, and paying...and paying. Let’s have a look at some of the worst offenders.
1. LinkedIn Premium and Sales Navigator
LinkedIn is the most trusted social media network around with over 750 million users and over 55 million companies on their platform. LinkedIn’s paid programs help companies recruit, network and close deals and these programs are typically well worth the money. But many companies find themselves paying for more than they bargained for, with subscriptions falling through the cracks, going unnoticed. And we’ve heard that it can be a nightmare to try to stop paying.
Case in point: Sales teams live in Linkedin and LinkedIn Navigator all day long as it's the tool of choice to prospect and close deals. As sales reps join a company, they sign up individually with a credit card for each account. Additional accounts are created as reps join and get to work, but as reps eventually leave a company, there is not the same sense of urgency to track down and cancel subscriptions. The rep who left is also in no rush to give up their paid account, either. And here’s the kicker: Once employees leave, companies have no easy way of matching charges with individual accounts, due to LinkedIn’s “privacy” rules.
But wait, there’s more. Blocking the credit card doesn’t work either. Don’t do it! All you will get is a blocked card and a bunch of failed payments to any subscriptions tied to it. (Many companies use one corporate card for all their SaaS subscriptions - a big no-no in our book). A total mess.
If you’re wondering why blocking your card doesn’t work with Linkedin, it’s another one of those smart plays by LinkedIn, just like the privacy rules. If your card declines, Linkedin is allowed to shift the payment to another card issued to the same account owner, without you even noticing. How convenient!
Frankly it’s disappointing to see LinkedIn engage in this opaque behavior and were shocked to learn about it. It’s just unnecessary and leaves room for improvement in terms of transparency and billing policies.
Tip: Many of our customers have cited this example when they began using Cledara to manage their subscriptions, we armed them with our Cledara virtual cards. They told us that they had tried everything and were at wits end until they simply created virtual cards for every subscription. When it comes time, they can now cancel in a click. Done.
2. Amazon Prime
Who doesn’t love Amazon? Indeed they are experts at keeping you on their hamster wheel of products and service because the value is simply amazing. Access to great TV shows, original series, movies and even live sports events. Last-minute spontaneous purchases arrive as quickly as possible, and the obsessive focus on customer service keeps you coming back for more.
The love starts to fade, though, when you try to unsubscribe. There are plenty of steps, and lots of attractive offers to try to make you think twice about cutting the strings. (Trying to cancel Amazon Prime is actually a very good way to get a good deal on the subscription itself if you’re inclined to change your mind).
Regulators have also started to notice. Amazon’s cancellation policy is now facing a legal challenge in Europe by the Norwegian Consumer Council, who argue that: "Throughout the process, Amazon manipulates users through wording and graphic design, making the process needlessly difficult and frustrating to understand.”
Indeed in 2019 the UK’s Advertising Standards Authority ruled that Amazon’s sign-up process made it too easy to register for Prime by mistake.
Tip: Subscription services like Amazon’s are tricky, because they have a mix of being very useful, relatively inexpensive, and very seductive to keep you hooked. It’s not that an Amazon subscription is going to tip your financial scales into the red, but when multiplied across a few different subscriptions, it all starts to add up. We advise you to always have full visibility on all your subscriptions by understanding the cancellation process upfront (as you sign up), and keep tabs on your subscription from time to time by checking your bank statements.
3. Adobe Creative Cloud
Unlike the previous two examples, Adobe’s creative billing tactics couldn’t escape the claws of social media. Lightning and thunder fell over Adobe and when they looked for shelter, they had an umbrella that couldn’t protect them from a drizzle. The whole thing was a classic story of fine print, assumptions about the ease of digital subscriptions, obscure tactics by a company keen on keeping subscriptions train rolling, and a fed-up customer base with the ability to type 140 characters really fast.
Most of us are used to a SaaS free trial requiring a credit card for an automatic renewal at the end of the trial period. But are you signing up for a month or a year? In Adobe’s case, the opaque strategy was (is) to position the price as a monthly price, but with an annual commitment that cannot be cancelled without a significant cancellation fee.
The topic blew up on social media in a lengthy debate on contracts, fine print, how subscription services should work and the responsibility of companies to do the right thing. While many pointed out that the cancellation fee was in the fine print, others pointed out that it was obscure enough and not common enough practice that it was inevitable most users would be confused. As one user pointed out: “It’s not like an apartment lease. They are not inconvenienced by you canceling your use of a purely digital product.”
Adobe is a software pioneer, has created ground-breaking products and actually is also the poster child for a successful shift to a cloud subscription model. We believe they should lead by example, and simplify their misleading subscription process.
Tip: If you subscribe to Adobe Creative Cloud, check your contract to see where you currently are in the subscription term. If your team is not getting the value expected, check the terms and start planning your cancellation. And if things get hairy, escalate, don’t capitulate.
4. Bonus: New York Times
Even though The New York Times isn’t a SaaS company per se, their digital subscription charges on a recurring basis and we couldn’t resist including them in the list.
We all have heard about un-intuitive unsubscribes, but cancelling a NYT subscription is something else. Three choices:
1. Call to unsubscribe: Yes, a phone call. Check your local country for the number and times of operation. And make sure you are seated with a glass of wine to get you through their attempts to retain your business once you get through to the correct agent.
2. Chat to unsubscribe: All you need to do here is engage in a mind-numbing chat with an “account manager” who invariably will try to convince you to stay by asking unrelated questions and shift you from one agent to another. Check out the transcript of one of these chats.
3. The third and most reasonable method consists in cancelling the auto-renewal function in the NYT app, and / or then cancelling the subscription from your Apple or Android account. Remember to delete the app from your phone too. More tips on how to unsubscribe from here. Not intuitive at all.
Tip: Any method you choose will be frustrating. Just stay focussed and get it done. Next time you subscribe to a similar service, take the time to understand the cancellation process upfront (as you sign up). Finally, check your bank statement for good measure.
A reflection about all this madness
Subscriptions have become a way of life across our personal and professional lives, and there’s no doubt we all derive amazing value from the services we love and depend on.
But we have two bones to pick here:
1. Long Term View: SaaS companies know that customer retention practices and low unsubscribe (churn) rates go hand by hand. And they are naturally obsessed with that, because customer churn is expensive. We get it. But this doesn’t justify misleading and opaque unsubscribe practices. It comes down to how confident a company is about their service and how well they know their target customer. Simply put: The unsubscribe process should be just as easy as the initial subscription. If a customer loses perceived value, they will be driven to abandon your service. Companies that obsess over their customers and serve them well know this, and should reinvest their energy into finding ways to make their service even more engaging, rather than inflicting pain when a customer chooses to leave.
2. Responsibility: There is a fine line between transparency, ethical business practices and creative billing practices. Retaining customers goes beyond creative tactics and rather to the core of a company’s values. We expect that the most respected SaaS providers of our time take this responsibility to heart and set an example for the rest of the industry on how to serve customers, regardless of where they are in the value cycle.
As SaaS enters its third decade, there is simply no excuse for the tricks and opaque behaviors to try to keep customers hooked. The flipside is pretty simple for companies:
1. Do the hard work of understanding your customers across their entire journey. Understand where the value is, do some research on yoru pricing models and ask your customers how they view your service, their willingness to pay, etc.
2. Combine this deeper understanding of your prospects and your customers with a transparent way to subscribe and unsubscribe.
3. Realize that your company success is tied to your brand perception, which is in turn tied to the experiences that all your customers have - both current, potential and past.