When was the last time you tried to give a company $100 and it refused to take it?
That happened to me this week as I bargained with Sirius XM Radio over continuing my membership to the satellite radio service. I said I would renew for a year, but only if the firm put in writing that it would not automatically renew my account. I’d had a bad time twice with the firm’s renewal policies, as have many others, and I told them I wouldn’t play renewal roulette again.
Sirius turned down my money rather than agree to my terms. That’s how critical automatic renewals are to Sirius XM’s business model.
It’s easy to see why subscription-based companies love automatic renewals. All that predictable revenue is lovely. And if a few — or a lot — of consumers end up paying accidentally for services they don’t want but don’t bother canceling, well, that’s just leveraging consumer behavior. Heck, that’s not a bad business plan. America Online’s dial-up still has 2.6 million paying subscribers, many who may have simply forgotten they are paying for it.
Sirius isn’t AOL. I still love the online service’s live sports offerings, though increasingly, I get what I need through streaming directly from sports leagues. Despite all the terrestrial and Internet competition, the satellite service passed 25 million subscribers last quarter, and optimistic investors keep hoping the stock will finally find its way above $5 for the first time since 2005.
When a company relies so heavily on automatic renewals, it’s worth questioning how loyal its customers are, however
See the entire original post at http://blog.credit.com/2013/08/breaking-up-is-hard-to-do-for-subscribers/