Do’s and Don’ts of Subscription: Discriminating, punishing loyalty and manipulating prices – 5/5

Definition and context

• Discriminating: Offering different prices for the same service based on customer profile.
• Punishing loyalty: Charging loyal customers more than new or less loyal ones for the same service.
• Manipulating prices (and information): Showing false or insincere promotional prices or savings.

Regulators’ preference 👮

They require that

• All customers of the same service pay the same renewal price.
• Price differences between services can be justified.
• Calculations of the amounts saved must be based on real prices (prices that the majority of customers pay).
• Customer segmentation must be done on objective criteria such as the product purchased, or the origin of acquisition (Retail, Trialware, Online). Segmentation criteria based on the customer’s supposed ability to pay more (e.g., postal codes) should be banned.
• Claims about services must be substantiated.

👍 The Do’s 👍

• Have a list of acquisition and renewal prices available.
• Explain the amounts of savings based on prices that customers could normally pay. 
• Align the price of the old subscription when launching a new, cheaper equivalent.
• Offer a discount for the first year to attract new customers. But make sure that only new customers benefit from it.

👎 The Don’ts 👎

• Don’t offer advantageous rates only to customers who cancel the subscription.
• Don’t invent a false promotion by striking through a price that no one has ever paid.
• Don’t present information in a confusing way in order to suggest a loss or gain of any advantage. For example, during the cancelation process, don’t suggest that the service stops immediately if this service has been paid for the next 3 months.