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Setting up commitment period for your products

How can you make your customers commit to X payment periods after they subscribe

Commitment period is extremely useful feature specific to Subbly which makes it so that customers can't cancel their subscriptions during 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 start, here's a 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 on the product setup basically adds number of billing cycles the customer will need to stay committed to the product. I.e., 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 setups, and you will be able to offer the same product for a longer term on a lower monthly price. 

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

Let's take an example. Say you're offering a subscription product for $50/mo. If we were to assume that the breakeven point for you on this price is only after customer's 3rd payment ($150 gross), you'd actually operate at a loss if the customer cancelled 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?

It's fairly straightforward - commitment term toggle can be found in the product builder when creating the subscription product. Find the input field for changing the number of billing cycles for commitment under Billing & Shipping terms, and set the number of billing cycles as needed.

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! Setting up commitment term only prevents customer from cancelling his/her subscription for the given period of time. Customer's subscriptions won't cancel automatically after the expiration of the commitment period, it will continue indefinitely until it's cancelled. 

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 customers checkout with a subscription that has a commitment term set for it, 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. 

If needed - subscriptions with commitments can be cancelled from within Admin, as Admin privileges override commitment period settings for the subscriptions.
Commitment terms does not work with gifting. If the customer's subscription is a gift, customer will still be able to cancel their subscription even if they are under commitment terms.
As mentioned earlier, customers can dispute payments with their bank for subscriptions that are still on commitment and this can block your payment collection. Primary reason for such disputes happen to be the fact that customers don't understand, or aren't aware about commitment terms. Such instances can be avoided by clearly communicating commitment terms through product description, product name/title, Checkout/Renewal confirmation emails, product page content, etc. Also include clauses covering commitment subscriptions and how they're handled on your Terms and Conditions, and include them in your checkout. Have your customer support channels easily accessible to your customers at all times, so customers can find it easier to clarify any doubts and concerns with you. If customers still dispute payments on Stripe after all these measures are in place, you can submit proofs of the fact that subscription payments are committed and communicated clearly across your store(TnCs, Emails, Product content, etc.) - so customers don't have deniability in such cases due to lack of clear communication, and you have much greater chances of winning such disputes.

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. If you're on Lite plan, commitment settings .

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.

How did we do?

How to set up pre-paid subscriptions?

Setting up trial period for subscription products

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