A few years ago I had a bad experience with a gym membership. That is, the membership was fine, but canceling it was a nightmare. It was obvious that the contract was set up in such a way as to get an extra $30 out of each customer when they quit, although it actually got worse than that. The result? I will never use that gym again (24 Hour Fitness, to name names).
On the flip side there are many services which, when you cancel, merely say “We’re sorry to see you go, your service will remain active through the end of the billing period and your card will not be charged again.” This, it seems to me, is the standard all services should strive for. I recognize in some cases that’s not feasible. For example, in cases where in order to provide a service a full-time team of employees must be put together, you can’t have someone sign up for that service and then a month later say “Aw, nevermind.” Sometimes there must be commitment. Even so, it behooves companies that provide services to recognize that regardless of how feasible or infeasible it may be, clients and customers want the option to cancel whenever they want, and companies that can provide that will enjoy higher levels of customer satisfaction.
But it’s not just customer satisfaction that matters. Sure, if someone has a good experience canceling a service they may be more likely to come back to you if they need it in the future, but it can also be a marketing tool. By giving potential customers and client an easy out, and advertising that fact, you also make it easier for them to make the decision to sign up and get in. For example, if I knew that a certain service required me to pay $10K per month for the next 10 years, I would think very long and hard about signing up. If, by contrast, the service was the same price but month to month, I’d be more likely to say “Hey, let’s try it out and see how it works.” If you are confident that once a customer tries your service it will work out well for them and they’ll stick with it, then you should make every attempt to shrink the length of the contract to make it easier for that customer to try you out. It can only benefit you. On the other hand, if you’re pretty sure your customers are going to regret signing up with you then of course it makes sense to lock them into a long term contract.
What do you think? Does giving customers an easy out make it easier to sign them up?