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Setting up commitment period for your products

Commitment period is extremely useful feature specific to Subbly which makes it possible for you to disable customers from being able to cancel for the duration of the commitment term. Here's how you can utilize it for best performance.

This feature is enabled on the following Subbly plans: Basic, Subbly and Advanced. 

Video tutorial

Before we even start, here's a nice video tutorial on how you can use commitment terms to replicate the same business case as Birchbox's:

What's the benefit of setting up commitment terms? 

Commitment term functionality on the product setup basically adds number of payment periods the customer will need to stay committed to the product. Ie., that means that the customer won't be able to cancel their subscription until the duration of the commitment term is up. 

This makes it possible for you to juggle between different types of product setup and you will be able to offer the same product offering for a longer term on a lower monthly price. 

This is a big deal to be honest. We tested this with merchant's and it greatly reduced churn (cancellations) and increased sign ups (due to lower monthly price for the commitment option).

Let's take as an example you offering the subscription product for a $50/mo. Let's take that the breakeven point for you on this price is only after customer's 3rd payment ($150 gross). This means that you're actually operating at a loss if the customer cancels their subscription before the 3rd month. This will possibly lead to you increasing the monthly recurring price of the product to cut possible losses which will further lead to the fact that your product will be less competitive compared to the competition. But what if we tell you that you can actually set the minimum commitment term for the customer, which will make sure that the customer will have to stay committed for at least 3 months if they'd want to be paying $50/mo? That's where Subbly comes into play!

How to set this up?

Very easy! Commitment term toggle can be found when creating the subscription product. Namely, you will have to manipulate the simple input field as seen below

Furthermore, if you'd want the commitment period disclaimer to be presented to your customers at the checkout, you will need to enable the functionality from this page here, as presented below


And that's it. You are all set!

FAQs

Is subscription going to cancel itself after the expiration of the commitment term?

No! Please note that setting up commitment term only prevents customer from actually cancelling his/her subscription for the given period of time. Customer's subscriptions won't cancel after the expiration of the commitment period but will continue indefinitely until necessary action is taken to cancel the account. 

What are the main benefits of setting up a commitment period for my products?

This will ensure that customer won't churn during the commitment period. And when you know that customer will stick around for a longer time, you can give them a discount on a monthly basis in order to incentivize them to commit to your product. 

Is commitment period shown on the checkout?

Not by default but you can enable the commitment term to be shown on the checkouts by going here and enabling the following toggle

Can customers cancel their subscription during the commitment term?

When they checkout on the product that has certain commitment term regulated, they won't be able to cancel their subscription from their customer login area until the commitment term end date is reached. 

However, please note that we can't prevent customers from pulling off money from their card or cancelling the card or even filing a charge back with their bank. In all of these situations payments won't go through and commitment terms won't be met. 

Why am I not seeing the commitment term option in the product setup?

Commitment terms are available from the Basic plan and higher as shown HERE. They will not be possible to add while on the Lite plan.

Will the commitment period apply when switching a customer to another subscription product or plan?

Yes, it requires the toggle Reset Subscription Order Count to be enabled when manually switching a customer from product A to product B within the Admin. By doing this you will initiate the commitment for the customer as soon the first payment goes through. You can find the explanation on how to do this here.

It's not possible to transfer the precise amount of commitment cycles from previous product. If the toggle is disabled, no commitment will be applicable, regardless of whether the previous product has it or if the new one does.

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