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Have you ever looked at the account lifetimes of users who have been grandfathered into a cheap plan versus the lifetime of a regular user on a regular plan? I
by jasonkester 15y ago
Have you ever looked at the account lifetimes of users who have been grandfathered into a cheap plan versus the lifetime of a regular user on a regular plan? It's quite a thing to see.
Grandfathered users will hold onto their subscription like it was made of gold. Even if they don't need the product anymore, you'll find them still hanging around for years because they know what a great deal they're getting. In mildly-innumerate-user-psychology, they're making money every month by keeping that old grandfathered plan.
So even though those guys are making you less money, they're going to continue making you that money pretty much forever. Way more over their lifetime than they would have had you forced them onto a more expensive plan, pissed off half of them into leaving immediately, then watched the rest trickle away through attrition.
- danshapiro 15y agoFurthermore, a user with low churn is worth much more than a normal user. In the phone industry, telcos pay over $300/head for a new subscriber, who will leave after ~30 months. That means they have to allocate $10/month during your subscription to find your replacement. It's worth giving an existing customer a $10/month discount by way of a grandfathered plan if it means they'll stay around.