Everybody wants you on a recurring subscription

[JoeWras]

Is anyone else getting tired of companies trying to jam a subscription model down your throat?

Seems like about a decade ago, the MBAs discovered that the best way to squeeze both customers and businesses is through a subscription model. No more buy once and forget.

Sure, this has been around forever with "razors and blades", or more recently, "printers and cartridges." But I'm talking a new, closer level of interaction. Monthly or yearly fees, whether you want them or not.

Pick your poison:
- Amazon Prime
- Costco membership
- Google play
- iTunes
- Netflix
- Turbotax
- Quicken (3 yrs now, what's next?)
- Satellite radio
- Dollar shave club, or new guy, Bevel
- Mobile phones
- Termite inspections
- Prepaid auto repair
- Grass service
- Water softener service
- Furnace service

The newest one I got was from Terminix. They called me up and wanted to know when they could schedule my "attic inspection." I'm like, "What attic inspection?" Apparently, they are just trying to get people on an attic inspection yearly service. I inspect my attic myself, once per quarter, thank you very much. Don't need your guy to pop in with his flashlight.

And about those furnace/ac inspections. I think there is a lot of fear here that they employ. Yes, it is not a bad idea to get a pro to check every few years, maybe every 5. But keep CO monitors in your house regardless. You can inspect and clean much of what they do anyway. And from what I saw from a "complementary" service I got when my unit was only 6 months old, I was horrified. The guy disabled all the safeties to "test the safeties". This heated up the heat exchanger to red hot. I don't think that is good for the system! Not the right way to test!

Now I'm off topic. But it just seems like some new recurring charge is popping up in my life and I'm not happy about it.

 

[Sarah in SC]

This model is why we reluctantly chose to go all electric when we built our house. I didn't want an LP tank in the yard that I'd have to pay to have "topped up" every month, which is the only model available.

We have signed up for the service deal once with the HVAC guys, simply because we needed service and a part replaced, and it was a better deal if we did the contract. But the next time they came out for the semi-annual inspection, the new tech had all kinds of high-pressure tactics to get us to re-up, and to do some superfluous maintenance.

Although, I do love my Spotify and Netflix monthly subscriptions!

 

[Midpack]

You can always say no to over half of the ones on your list, and what subscriptions are required with Google Play, iTunes and TurboTax (none that I know of)? If the monthly/yearly subscription will truly save me money through lower costs without imposing a frequency I think is excessive (no more frequent than I'd otherwise choose) - I'm all for it. If not, just say NO, how hard is that?

Mobile phones is a little different, I think consumers have driven that, because lots of people can't or don't want to pony up for the phone upfront. So they prefer (by their actions at least) to spread the cost of the phone over 2 years.

Some other companies use teaser rates in year 1, and make it up on year 2, 2 year contract. It's easy to figure out when those are deals or not, but evidently many people don't think it through. Caveat emptor.

And you can negotiate with some of them if needed. For example, I sign up for lawn fertilizer service annually, and save another 10% by paying in Feb. They recommend 6 applications/year and some other treatments, but I insist on only 4 treatments (and even specify the first, second, fourth & sixth) - and I still get all the same discounts (prorated cost less 10% in Feb). Works for me, and lowers their prices, win-win.

Cable/satellite TV bundling bothers me way more than subscriptions, but that's another (already well worn) thread...

 

[travelover]

Good point. I just hope financial advisers never go this route. Oh wait...too late!

 

[ERD50]

Is anyone else getting tired of companies trying to jam a subscription model down your throat? ....

And about those furnace/ac inspections. ...

edit - on my first cup, I thought you were talking about ads from businesses in your email - oh well, applies in a way so I'll leave it --- They don't offer a simple 'opt out'? No these don't bother me, it makes good business sense for them, and there are a few that I really do want an update on sales, etc. The rest, I opt out. Fixed.

Now what I think is stupid, is when they don't have an option for weekly or monthly updates, or maybe the occasional super-deal-sale or special event notice, and your only choice is daily or nothing.

Agree on the furnace inspections for NG (maybe that would be worthwhile as a separate thread?). I'm with the observation from Nords that too much maintenance often causes more problems, but you need to know what to look/listen for, and many people do not. But like personal finance, they could learn what they need to know in 10 minutes or less.

-ERD50

 

[athena53]

When I went out to get my own smartphone after retiring I was surprised how hard the salesman worked to try to discourage me from buying the phone outright. I asked why. He said, "we want to have a long-term service relationship with you." Umm, yeah. I bought the phone anyway.


We do have a service contract with out heating/AC provider that includes semi-annual inspections. I'm happy to say the inspections haven't turned up a laundry list of "problems".


What annoyed me when I was using a lawn-mowing service (I was single and traveling a lot), they showed up every darn week even if the weather was hot and dry and the grass had grown only a couple of millimeters. I mow my own lawn now and sometimes I can go for weeks without having to mow it.

 

[FUEGO]

I don't pay for any of those subscription services on your list.

Technically I do pay $10/yr for DW's T-mobile phone (mine is free on freedompop). It's not a subscription since it doesn't get paid unless I whip out a credit card.

And netflix - I'm on my mom's $8 plan. I just gave her a basket full of ripe bananas as payment for using her account. Does that count? I would definitely pony up the $8-9 for an account though since the five of us in the house get a lot of nearly free entertainment out of it.

Moral of the story is you can skip a lot of the recurring fees. I don't see them as necessarily a bad thing, but choosing to go a la carte and pay for services as you use them is often the cheaper way to consume. I skip the $50 for costco (for example) because I can shop for free elsewhere and get better bargains.

I view the subscription fee model as a way to convert you into a captive customer (which is genius, fyi). The inertial effect of doing nothing and still being a revenue point for a business is awesome (for the biz). And you're psychologically more likely to choose that service provider since you're already paying for them and "might as well use them". If you have a contract with an HVAC company, are you really going to shop for the best rates for a given service or repair job (or replacement if it's time for that)?

 

[Midpack]

When I went out to get my own smartphone after retiring I was surprised how hard the salesman worked to try to discourage me from buying the phone outright. I asked why. He said, "we want to have a long-term service relationship with you." Umm, yeah. I bought the phone anyway.


We do have a service contract with out heating/AC provider that includes semi-annual inspections. I'm happy to say the inspections haven't turned up a laundry list of "problems".


What annoyed me when I was using a lawn-mowing service (I was single and traveling a lot), they showed up every darn week even if the weather was hot and dry and the grass had grown only a couple of millimeters. I mow my own lawn now and sometimes I can go for weeks without having to mow it.

You make the best choices for yourself, and say no to offers that aren't to your advantage. Easy-peasy, as it should be...

 

[JoeWras]

You can always say no to over half of the ones on your list, and what subscriptions are required with Google Play, iTunes and TurboTax (none that I know of)? If the monthly/yearly subscription will truly save me money through lower costs without imposing a frequency I think is excessive (no more frequent than I'd otherwise choose) - I'm all for it. If not, just say NO, how hard is that?

Of course you can. I always say "no" to stuff being jammed down my throat. I told Terminix they could take their attic inspection somewhere else.

My point is that there is a creeping tendency of this. Some day I predict you won't be able to buy a CD or MP3. You'll have to stream it through subscription.

More alarming are companies who won't serve you unless you are a subscriber. I'm thinking maintenance. Etc.

It is just the creeping pervasiveness of the model, Midpack, that has me a bit hot. "No" for now, but maybe not someday.

Want your Quicken to do on-line stuff? You better not say "no".

Windows 10? Hmmm... There is rumor of what the payment model for that will be, and in my mind, it ain't good.

 

[Masquernom]

Another to add to your list, doctors. There is a trend starting for family doctors to switch to the subscription model. But that might not be a bad thing. Your doctor charges you a monthly fee, and then doesn't take insurance reimbursement.

 

[rodi]

The one that bothers me the most is software packages. Adobe and Microsoft push the subscription licenses. Part of my budget trimming was cutting or reducing the reoccurring expenses. Yet my kids keep coming to me with "needs" (actually wants) that are subscription based. Xbox live.... Adobe studio.... I'm a mean mom because I reject them out of hand.

 

[athena53]

And another- cloud computing applications. Last time I bought a computer and wanted to buy MS Office, I had to work a little harder to find a version that wasn't basically a rental. Sadly, I think this will be more and more common. Since I keep computers till they die, which is usually 4 or 5 years, I don't want to pay monthly subscription fees for my software.


I've also learned to be wary of automatic renewals for virus protection and tax software. Fortunately they typically send you an e-mail at renewal and you can reverse it if you didn't want to renew.


Ah, I see Rodi beat me to it!


I'll add another: credit card membership fees. DH and I pared back last year, dropping two that had annual fees, adding one with fees (but a good signing bonus) and the Fidelity Amex (no annual fee, 2% back on everything). We still keep another with a fee (Marriott Visa) because your credit rating goes down if all your credit lines are recent. I'm pretty cautious about ANYTHING that entails regular payments and am tracking our expenses in more detail now that I'm retired. The "Memberships" category will get particular scrutiny.

 

[pjm-7]

To avoid having recurring charges I go old-school and write a check. I have a magazine subscription that I have let expire but they keep sending me notices to just give them a credit card and it will automatically renew. No thanks, don't want it anymore.


A couple of years ago I got a gift of discounts on massages. Nice, but they wanted to sell me a package deal for discounts on twelve massages for a year. I told them that "I do not sign contracts". They looked at me like my head was screwed on wrong (maybe that's why they thought I needed more massages). I used up the gift and if I need a massage in the future I will call them. Haven't needed one since I FIRE'd.

 

[Major Tom]

My only recurring costs are rent, $8/month for a land-line, and $23/month for DSL. Mind you, the frequency at which I've been buying things on eBay recently suggests that I might as well have a subscription to that

I agree with Midpack that we have a choice in what we sign up for and what we choose to say no to, but do see Joe's point that more and more companies seem to be favoring the subscription model. Unless things have changed recently, you can no longer purchase Photoshop outright - you have to have a current subscription in order to use it. I was rather floored by that but when my copy of CS2 becomes so long in the tooth that I can no longer use it, I will change over to Lightroom.

 

[fanmail]

Some obv ones that have been around for awhile
Cable TV
HOA dues
All types of insurance
ESPN insider
Expense Ratios
Country clubs

 

[audreyh1]

I'm staying away from the software subscriptions.

We've gotten rid of quite a few media subscriptions, and I don't mind the ones where I can turn it on and off month to month. We only keep what we use.

Shopping memberships - only where I get a lot of value.

Utilities (including Internet) - no problem, I use them constantly anyway.

Cell service is the most insidious. We are about to get out from under contract and we look forward to the flexibility.

People are always trying to sell you something. It's the Great American Way! ERs have usually already learned to say no to parting with their money.

 

[mpeirce]

To avoid having recurring charges I go old-school and write a check. I have a magazine subscription that I have let expire but they keep sending me notices to just give them a credit card and it will automatically renew. No thanks, don't want it anymore.

Our BOFA Visa has a service called ShopSafe where you can get a limited use credit card number (based on your card). It's a mild pain to use - you have to go to their web site to generate the number - but it's handy for two purposes:

1 - dealing with a vendor I'm not comfortable with handing over my regular credit card number. Usually any web site besides Amazon ;-)

2 - subscriptions. You can set the expression for the card number so there is no chance they can use it to renew a subscription with it.

I honestly can't remember the last time I wrote a check...

 

[Midpack]

...but do see Joe's point that more and more companies seem to be favoring the subscription model.

I see his point too, but "jamming it down our throats" is a gross oversimplification.

More and more companies are offering various subscription models, not only because it works well for them (cash flow, customer retention, lower cost) BUT/AND because a critical mass of consumers see the subscription model as a better value/convenience proposition themselves. Neither can simply force this evolution on the other. That same critical mass of consumers is growing every day, and they want other products/services in their lives to be just as easy - that's where the demand comes from, not just companies. Just Google, there are plenty of good discussions about the topic.

Killing off CD's certainly wasn't forced on us by the recording industry, other enterprises (Apple et al) offered an alternative that a majority of consumers came to prefer.

Killing off DVDs/BDs certainly wasn't forced on us by the motion picture industry, other enterprises (Netflix et al) offered an alternative that a majority of consumers came to prefer.

If you find an industry where the subscription model is the only game in town or financially way more attractive, it's ultimately because there are too few consumers who want the prior product/service model. It's not simply companies 'jamming things down our throats' regardless of what those who prefer the old model might choose to believe. Most people don't want CDs anymore, like they no longer want cassettes, 8-tracks, LP's, 45's, 78's or wax cylinders. I'd sure hate to have to go back to a brick-n-mortar store to buy software, or especially the convenience of software updates - yipes. Commerce is a two way street, always has been, always will be...

Once customers taste streaming video rather than buying physical DVDs, using Zipcar rather than buying your own or storing business files in Box as opposed to on your own server, they want all their lives to work as simply as that. This is what we call the Subscription Economy.

A recent survey of 293 business executives in the US, UK and Australia, found that four out of every five businesses surveyed are currently seeing changes in how their customers prefer to access their services.

 

[W2R]

Is anyone else getting tired of companies trying to jam a subscription model down your throat?

Seems like about a decade ago, the MBAs discovered that the best way to squeeze both customers and businesses is through a subscription model. No more buy once and forget.

Sure, this has been around forever with "razors and blades", or more recently, "printers and cartridges." But I'm talking a new, closer level of interaction. Monthly or yearly fees, whether you want them or not.

Pick your poison:
- Amazon Prime Yes, my choice because I love the free shipping
- Costco membership No, I don't belong to any warehouse clubs
- Google play Didn't even know it existed.
- iTunes Nope, don't pay them any regular money
- Netflix Nope - - I have F's Netflix installed here and I have yet to watch anything on it
- Turbotax Really? I had no idea they even HAD a subscription, and I use TT to do my taxes every year.
- Quicken (3 yrs now, what's next?) I bought it one year but no subscription because I didn't want to avail myself of their great and all-consuming desire to obtain all my passwords to download things for me.
- Satellite radio No way!
- Dollar shave club, or new guy, Bevel Er, it helps to be female.
- Mobile phones Yep
- Termite inspections Yep
- Prepaid auto repair You're kidding? How do they know what repairs you might need? No way.
- Grass service Yep
- Water softener service Water out of the tap is terrific here. No need for softener.
- Furnace service I get a postcard from my HVAC guy twice a year, and ignore it...

The newest one I got was from Terminix. They called me up and wanted to know when they could schedule my "attic inspection." I'm like, "What attic inspection?" Apparently, they are just trying to get people on an attic inspection yearly service. I inspect my attic myself, once per quarter, thank you very much. Don't need your guy to pop in with his flashlight.

And about those furnace/ac inspections. I think there is a lot of fear here that they employ. Yes, it is not a bad idea to get a pro to check every few years, maybe every 5. But keep CO monitors in your house regardless. You can inspect and clean much of what they do anyway. And from what I saw from a "complementary" service I got when my unit was only 6 months old, I was horrified. The guy disabled all the safeties to "test the safeties". This heated up the heat exchanger to red hot. I don't think that is good for the system! Not the right way to test!

Now I'm off topic. But it just seems like some new recurring charge is popping up in my life and I'm not happy about it.

Subscriptions and any other sort of regular monthly charge or fee is the best destroyer of LBYM and budget that I can think of.

That said, here in New Orleans, anybody who doesn't have an annual termite inspection in place has lost his mind and it has been that way forever. The city is riddled with termites due to our warm Southern weather and historic buildings, and you can't even sell your house without a termite inspection contract in place because buyers insist upon it.

I have always had a cell phone contract so that's nothing new for me.

I sought out Amazon Prime rather than them seeking me out, and the same goes for my lawn guy.

The one service you listed that annoyed me no end, was the Sirius radio that came with my car when I bought it. They pestered me for almost a year trying to get me to sign up. Next time, NOT having that installed in the car would be a big "plus" when I am deciding what car to buy.

But other than that, I haven't been approached by, and wouldn't use, the vast majority of the subscription services you listed.

As for software, I refuse to rent it and it seems like that is all one can do any more in order to obtain most software. I would have BOUGHT a number of software packages if that option were still available, but it isn't. So, software companies have driven me (and surely many of their customers) away permanently by switching to the subscription model.

 

[utrecht]

I dont know how Sirius stays in business. Pandora and iHeart Raido are free and much better (as long as you have an aux jack or blue tooth in your car).

 

[photoguy]

I dislike subscriptions but they can be a good deal when you are not locked into a contract. For example, we'll only run netflix when there's a new season of a show we want to watch (or we'll have guests that will want to use it).

The one that bothers me the most is software packages. Adobe and Microsoft push the subscription licenses.

Adobe got a huge amount of blowback for their creative cloud but they stuck to their guns and do not offer Photoshop as a stand alone program anymore. However the package I have is not a bad deal at $10/month (photoshop + lightroom upgrades would normally be about $450/2years)

I'm staying away from the software subscriptions.

Does that include photoshop? I think CS6 is still fairly close to the current version of CC but I imagine future versions might have some key feature that would be helpful.

 

[harley]

I dont know how Sirius stays in business. Pandora and iHeart Raido are free and much better (as long as you have an aux jack or blue tooth in your car).

I'm not sure they are better musically, but I do know that when you are traveling and going in and out of cell range they're nowhere near as good. I suspect that's part of it. I don't use any of them regularly, but I have friends that do and that's what they tell me.

 

[yakers]

Hey, my church likes charging my CC monthly. They like the cash flow, I like the rewards (Both types )

 

[mpeirce]

Adobe got a huge amount of blowback for their creative cloud but they stuck to their guns and do not offer Photoshop as a stand alone program anymore. However the package I have is not a bad deal at $10/month (photoshop + lightroom upgrades would normally be about $450/2years)

I think I've used Photoshop since 1.0 (at least close).

Their subscription model drove me away. Now I use Pixelmator.

 

[EastWest Gal]

We bought a lifetime subscription to Sirius in 2006 for $250. Now Sirius/XM, 3 cars and the house. Comedy, politics, every choice of music. No ads on music channels. All for 8 cents/day, paid in 2006! They lost money on us. Will keep DS on it forever and figure out a way that he gets to keep it.


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