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There's something about human nature where we definitely prefer to make recurring payments. Think about 40 bucks a month for an alarm system, or 60 bucks for t

by riffer 16y ago

There's something about human nature where we definitely prefer to make recurring payments. Think about 40 bucks a month for an alarm system, or 60 bucks for the gym. That's roughly 5-7k over a ten year time span, and even if you adjust for time value of money and the user having the cancellation option, at the end of the day it's ridiculously easier to get people to make a monthly payment for those sorts of services than it would be to get a one-time upfront multi-thousand dollar payment.

myoung8 16y ago
I think you've pointed out a good rule of thumb: if the intrinsic value of the product is more than what most people would be willing to pay in a one-time payment, you should charge monthly for it. Clearly there are other factors that go into it, but that's one way to look at it.
matt1 16y ago
There's something about human nature where we definitely prefer to make recurring payments. I think I'd rather pay a one time fee for software. My fear (and I doubt this is only me) is that I'll forget about it and wind up paying for it long after I've used it. Great for the services I pay for, but bad for me. Is there any software you pay a recurring monthly fee for? If so, what is it? And if not, why do you think that is? Consider a hypothetical example: You can pay $50 once for Textmate, or $8/mo. Which would you prefer? How about $4/mo?
- riffer 16y ago
  I may not be the best example, because I am ridiculously frugal. There are very few things I pay for beyond food, rent and travel, which is another way of saying I pretty much exclusively use free tools. Incidentally, when my 30 day trial of Textmate ended, for some reason the software kept working and rather than pay for it, or stealing it by continuing to use it, I just switched to another editor. That said, if I really wanted to spend money on Textmate, yes, I would prefer to pay 50 bucks rather than either $4 or $8 monthly. At a $1 or $2 a month, I would probably be indifferent. To some element there's an issue of how long the purchaser will actually use the tool vs. how long they estimate they'll use it. I agree with you 100% that we develop countermeasures because we know that these recurring monthly plans are dangerous. My sense is that we develop the countermeasures exactly because the monthly plans are so effective at separating us from our money, and that the countermeasures only partly offset the tendency. Of course, for you may have an outright aversion to the monthly plans, just as I have excessive frugality, but overall my sense is that for most people monthly plans go over better than upfront charges in most situations.

by riffer 16y ago

myoung8 16y ago

I think you've pointed out a good rule of thumb: if the intrinsic value of the product is more than what most people would be willing to pay in a one-time payment, you should charge monthly for it. Clearly there are other factors that go into it, but that's one way to look at it.

matt1 16y ago

There's something about human nature where we definitely prefer to make recurring payments. I think I'd rather pay a one time fee for software. My fear (and I doubt this is only me) is that I'll forget about it and wind up paying for it long after I've used it. Great for the services I pay for, but bad for me. Is there any software you pay a recurring monthly fee for? If so, what is it? And if not, why do you think that is? Consider a hypothetical example: You can pay $50 once for Textmate, or $8/mo. Which would you prefer? How about $4/mo?

riffer 16y ago
I may not be the best example, because I am ridiculously frugal. There are very few things I pay for beyond food, rent and travel, which is another way of saying I pretty much exclusively use free tools. Incidentally, when my 30 day trial of Textmate ended, for some reason the software kept working and rather than pay for it, or stealing it by continuing to use it, I just switched to another editor. That said, if I really wanted to spend money on Textmate, yes, I would prefer to pay 50 bucks rather than either $4 or $8 monthly. At a $1 or $2 a month, I would probably be indifferent. To some element there's an issue of how long the purchaser will actually use the tool vs. how long they estimate they'll use it. I agree with you 100% that we develop countermeasures because we know that these recurring monthly plans are dangerous. My sense is that we develop the countermeasures exactly because the monthly plans are so effective at separating us from our money, and that the countermeasures only partly offset the tendency. Of course, for you may have an outright aversion to the monthly plans, just as I have excessive frugality, but overall my sense is that for most people monthly plans go over better than upfront charges in most situations.