How can you do everything possible to prevent subscribers from canceling their subscription or membership, without the FTC coming after you for fraud?
Maximizing new subscriber sign-ups and minimizing churn or cancelations should be a high priority for every subscription business.
And, when you have a motivated team that’s focused on hitting their numbers, if they aren’t monitored by a compliance attorney, you sometimes see tactics that cross the line.
Amazon Prime has been using a sign-up process that’s so easy, that many customers don’t even realize they’re starting a subscription. See it here.
Business Insider called out Amazon Prime’s cancelation process, saying it was “excessively hard!” – Ouch!
It’s fine to make an effort to demonstrate value and invite the customer to reconsider their decision to cancel, but in the end, the subscriber must be able to cancel without jumping through silly, irritating hoops, or worse, by a subscription business deliberately hiding the cancel button!
To avoid compliance issues, the FTC is very clear. They recommend subscription companies follow three key requirements:
- Clearly and conspicuously disclose all material terms of a subscription product or service. Yes, be upfront that a subscription is being offered, and declare the price and billing frequency.
- Obtain a consumer’s express informed consent before charging the consumer for products or services. Avoid any sneaky practice of getting them to click on a button without realizing they’re starting a subscription.
- Provide easy and simple cancellation procedures. It’s not difficult to do that, and customers deserve to be treated well, even when they decide to cancel.
Jeff Bezos is famous for the quote, “The No. 1 thing that has made us successful by far is obsessive-compulsive focus on the customer.” In the light of this FTC investigation and what I show you in this video, does the Amazon Prime processes live up to the philosophy in that quote?
This episode of Be Unleavable® Subscription Growth breaks down Amazon’s Prime sign-up tactics and cancelation process, and reveals where they went too far, so you can avoid a similar investigation.