As the subscription model becomes a mainstay of the consumer economy, users are becoming more discerning about what they sign up for. In fact, many are now hesitant to subscribe to a service unless they know they can easily cancel it.
According to research from Chargebee,82% of respondents said they were more likely to subscribe if cancellation were straightforward. In addition, 79% said the ability to pause a subscription was important. And people are using that feature: more than half of respondents reported pausing a subscription at some point—suggesting that consumers are more likely to stay longer if they have the flexibility to step away temporarily.
New Tools for Flexibility
That same appetite for flexibility extends to cost. More than two-thirds of consumers said they would prefer usage-based pricing models for their subscriptions. Nearly as many said they would switch to a hybrid model, such as a flat fee combined with overage credits, if it was offered.
What’s more, the highest-value subscribers are often the ones who want that flexibility the most. Chargebee found that nearly half of respondents fell into a segment it calls “anxious spend optimizers.” These consumers spend more than average, but also question the value they’re receiving and are quick to leave if their needs aren’t being met.
The research also supports the use of personal financial management (PFM) tools, which give subscribers more control and visibility over the services they’re paying for. These tools help consumers track their subscriptions and ultimately deliver the value they’re seeking.
“Everybody can benefit from having that full picture,” said James Wester, Co-Head of Payments at Javelin Strategy & Research said in a PaymentsJournal podcast. “Everybody has a lot of subscriptions, especially now as we start unbundling things like cable and cell service and everything else. Being able to use a tool like that, it does benefit pretty much every consumer.”
Click-to-Cancel Goes Down
Regulatory efforts to make cancellations easier have stalled. Under the Biden administration, the Federal Trade Commission took steps to make subscription cancellation easier with its so-called “click-to-cancel” rule. But, the cable industry, home security companies, and advertisers challenged the FTC in court, arguing that it was trying to “regulate consumer contracts for all companies in all industries and across all sectors of the economy.”
In July, a court vacated the rule on technical grounds, and the FTC has not appealed the ruling. That said, as Chargebee’s findings suggest, such a rule may not be as detrimental as the industry groups claim. Many companies have gained subscribers and fostered loyalty by offering a simpler path to cancellation.
