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Choose The Right Subscription Service Or Else

A subscription service is the price you have to pay to have access to a product or service, and most businesses are paid up front, but rural subscribers are taken advantage of.

Industries that use this business model to exploit rural consumers include AT&T, exercise brands, Netflix, cable television, pay-TV, software providers, magazines, newspapers, etc.

Problems Of Subscription Service

One problem I see with subscription service is that charges are automatically paid from the credit card or checking account for a set period of time.

This business model is a so-called convenience for the customer to not have to remember to buy the product.

In exchange for the “convenient” pay-as-you-go service, you get an iron clad contract.

For example, a subscription service for Internet, mobile and satellite/cable TV services from AT&T charge you for basic and high-speed access.

When the bill comes you find out that you owe $543/month, which includes additional charges for services you may not know of.

With these so-called “bundle” subscription services such as landline phone, call features, long-distance calls, etc., you could literally have hell to pay trying to switch, change, reduce, upgrade or cancel service.

When basic service is offered at a lower price, due to bundling, additional charges may apply depending on usage …

Subscribers will never win because you don’t bother to read the long, complicated policies filled with arbitration legalese.

And, because you don’t read the policies/subscriber’s agreement that change periodically, you may be subject to bait and switch terms.

Another example, the business baits you with low prices and a short term limit, but raise the price and extend the term after the initial term expires, without notice.

You just keep paying.

Should you decide to cancel the subscription before the initial term expires (they have milked you dry from inflated fees) you will have even more hell to pay.

Since I am singling out cable companies, it is difficult for me to understand how transmitting satellite signals cost so much.

In comparison, the same signals are transmitted through “free TV” antennas, but don’t cost a penny.

Subscription service is more complex than I can explain, but there seem to be three cost recovery schemes such as “paid transmittal – basic/unlimited ”, “non-paid transmittal – free TV antenna” and “controlled transmittal – slow usage”.

Businesses Benefit From Subscription Service Schemes—What About You

Businesses benefit because they are assured predictable and constant revenue from subscribers for the duration of the subscriber’s agreement.

Other business benefits include:

  • A subscription service reduces the riskiness of subscribers
  • Provides payment in advance while allowing subscribers to become attached to using the service
  • Subscriber is more likely to extend the agreement for the next term close to when the initial agreement expires.

A subscription service is good for businesses, but bad for subscribers.

Other than convenience, what else are you getting out of it?

Studies show that the subscription pricing structure is designed so that the revenue stream from “recurring” subscriptions is considerably greater than revenue from simple, one-time purchases.

In fact, some subscription services do not give subscribers the option to accept or reject any specific product/service, which is common practice with bundling.

This reduces their costs!

Subscribers are taken advantage of by businesses, which is why they do not want to lose customers—they hate opt-outs!

Another problem of subscription service is that business’ sales and support staff is too happy to sell subscriptions to make bonuses, and keep the overpaying suckers happy.

Consumers Love Hate For Subscriber Service

You may find subscriptions convenient if you believe that you will save money; but have you ever saved any, after the initial $14.99/month, 12-month term?

As you know, subscription pricing can make it easier to pay for expensive items.

Since it can often be paid for over a period of time, the product/service, in theory, is more affordable.

More than this, some subscriptions are paid upfront, but this isn’t a company preference because it might prevent some customers from signing up for “subscriptions”!

Were we better off without all of these subscription schemes?

Still don’t think it’s a scheme?

I have heard many rural consumers comment that their subscription is “locked-in.”

Therefore, they find continuing payments to be a disadvantage when they don’t use or plan to use the service frequently.

To my point, my PC spy ware has always been turned on, but now that I have Norton, it is suspiciously “turned off,” suddenly.

As a result, I am getting frequent Norton pop-ups trying to sell me another subscription because they know the spy ware software has been disabled (hmm).

Finally, a subscription model is beneficial for businesses.

They’re even trying to sell you some hog wash about when a customer renews a subscription it may have a psychological affect.

Also, the theory is that if a subscriber is not satisfied with the subscription service, you can “simply” cancel the subscription.

Once you are locked-in a subscription contract, you are held hostage to make payments, and pay a high penalty for “early termination,” which is buyers remorse.

These businesses don’t care that you’re on the hook to “give” them more money than they rightfully deserve.

Subscription services were not designed for you to save money or receive value because it is an unreasonable and overpriced business model.

The rural consumers who do not receive value must look for a better deal with a month-to-month payment plan.

Author’s Info:  Tonza Borden is a 20-year finance and digital marketing expert with a passion for coaching and training. She is also an advocate for people with disabilities and the working poor. Visit her website at RuralMoney.com for exclusive community resources and strategies for your financial future. Google+

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