Automatic renewal is a neat feature for people who offer a subscription service. It lets you bill your customer automatically, usually on a monthly or yearly basis, to renew the service. Automatic renewal has become a way of life for many of us. You get monthly bills from utilities, the Phone Company, and subscriptions you have purchased.
Technology has made automatic billing even easier. Now you do don’t need paper bills or even email notification. Your payments can be automatically deducted from a credit card or other account.
Isn’t this great? It’s so convenient!
Well, yes, it is great for the vendor. Paperwork is eliminated and a steady stream of income is almost guaranteed.
What about the customer? Well, it can be great. Your bills are automatically paid in a timely manner so you never have to worry about interruption of service.
But automatic renewal can easily be misused by the vendor. A number of companies set their billing to automatic renewal when you first sign up for a service. This can be very convenient, especially if you are notified when billing occurs and have an easy way to question the billing or cancel the account.
Misuse and sneaky billing occur when the vendor makes it very difficult to see, question or change the billing. This billing policy can change a satisfied customer into a very unhappy and vocal one.
A year ago I signed up for a year of service from a particular vendor. At first there were emails and notifications to support my use of the service. After a while they dropped off to nothing. My interest in the service waned and I stopped using it. Suddenly two days ago, I started receiving emails with the subject line, “Daily Reminder,” urging me to use my account. This and the deduction from my credit card were the only notifications that the account had been automatically renewed.
Revisiting the site, I discovered that my settings indicated a preference to auto-renew the account. I immediately looked for a way to contact customer service. This information was buried. The only information provided on the Contact Us page was a postal address. Finally I did find a “customer service” email address, but had to pretend interest in a purchase to get it. I contacted them and was told my account was now “cancelled” and I would not be billed again, but there was no mention of a refund for the yearly subscription that I did not want and had never overtly authorized.
Where once I would have gladly recommended this company and its service to friends and colleagues, now I will tell them to avoid it at all costs: all because the billing policies did not match the implicit customer service promise made at the time of purchase.
So what is the lesson learned?
Automatic billing renewal can be a great tool, both for the vendor and the customer. It can enhance customer service when handled properly. When handled improperly, it can damage the customer’s perception of your company and your service.
When using automatic billing, keep these suggestions in mind:
- Make it clear to the customer, at the time of sale, that billing will be automatic.
- Send automatic notifications to your customer showing each bill and payment information. Use this as an opportunity to thank your customer and even to showcase new products and options that they can buy.
- Provide a quick, easy way for customers to reach your customer service group or function. This should always be done!
- Give your customer a simple, easily found method to convert automatic payments to manual.
- If your subscription renewal is yearly, or some other period longer than a month, make sure to let your customer know that the renewal is coming up and will be handled automatically. Use this as an opportunity to sell additional products/services or to remind them of the benefits of your service.
Automatic renewal can be a valuable and useful tool. It will stabilize your revenue streams and can maintain or increase your customer’s loyalty when used properly. Neglect the suggestions above and you may be accused of “sneaky billing,” leading your customer to question whether you care about anything beyond the money.
