The 3 tricks subscription services use to profit off of you

From delivery services (Amazon) to music streaming services (Spotify), hell, even a subscription for… butter? (as of the time I’m writing this, it’s even out of stock!)

Regardless of the industry, there seems to be a never-ending amount of these subscription services.

There’s a reason for that.

People love subscription services and, in return, companies just keep churning them out, to keep up with the demand. The market for these weekly/monthly/annually/whatever-lly payments have been facing lots of growth, with the market expected to reach just shy of 1 trillion by 2026.

Clearly, they are profitable. In this article, I’ll be going through the 3 most used tricks and psychological strategies companies exploit to take advantage of our cognitive biases and thinking. In which, increases the retention rate and sign-up rate for them, increasing their profits even further!

Why am I (going to) tell you this, you may ask?

Because, if you know more about it, then you are less likely to fall for their traps, which means you save money! And, who doesn’t like to save money?

(or, if you are a business owner, then these will help you in launching your own subscription…)

The ‘free’ trial trap

Many companies offering a subscription service will entice you with a ‘free trial’ offer. These can range from one week, to one month, to just a few days.

Almost all these companies, who are offering a free trial, will still make you input your credit card information. This is because, a lot of people end up forgetting to cancel the free trial before it’s too late.

This technique also takes advantage of the foot-in-the-door technique. Most commonly used by salesmen, the technique involves asking for a small request, then asking for a much bigger request afterwards. Due to the first request, you are much more likely to comply with the second request than if they had opened up with the big request, first.

Within context - a free trial would be the small request, as you’d give them your email or card details, with you outright paying the subscription as the bigger request.

Sometimes, instead of a free trial, they may offer you a heavily discounted subscription price for the first month, such as a dollar. This is another example, in which the small request is the (much more affordable) subscription, than paying the standard price afterwards.

Excuse me, I now remember that one student free trial I had gotten from Amazon. I now need to cancel it…

‘Why can’t I find out how to actually cancel the subscription?’

Have you ever noticed that, to actually cancel your subscription, you have to look hard and/or go through several steps beforehand?

Well, companies do this intentionally. They convolute and overcomplicate the many hurdles you have to go through, just to cancel the subscription. This idea is known as dark patterns, the utilisation and modification of behavioural and user experience (UX) techniques to influence you into making a certain choice.

The idea behind making it harder to unsubscribe/turn off recurring billing is so you give up looking for it, telling yourself something along the lines of, ‘I’ll just figure it out later…’

That ‘later’ turns into days.

Weeks.

Months.

Years. (ok maybe not THAT far, but, you get the jist)

By the time you think to yourself, ‘now it’s time to cancel that Audible subscription’, you may have already paid for another month.

Another dark pattern they use is, when you finally find the place to stop paying for the service. They may suggest that, if you unsubscribe, you’ll lose your benefits immediately. This is a way to nudge you into keeping the service, at least until when it’s about to expire. But, instead of cancelling before it expires, you end up forgetting, paying another month for the service.

Price anchoring

If you don’t know what this is, it’s a technique used where a product/service has multiple versions, of varying prices. By pitting one price against another, you may be inclined to pay for the cheaper option.

This strategy is very synonymous with subscriptions. When you get to the page, you are presented with several options, usually of varying prices. There’ll, often, be a premium option, which is the most expensive. Then, there’d be the mid-range option. And, finally, there’d be a more affordable option.

You may be inclined to go for the most affordable one as it’s, you know, the most affordable. It may not even be affordable, just, relatively, more affordable than the other options. This is an example of the door-in-the-face technique. (no, not the foot-in-the-door technique) This is a compliance strategy by offering you an unreasonable offer, than offering you a much less unreasonable offer. Even if the much less unreasonable offer isn’t that good in hindsight, it looks, relatively, great as it’s a much better offer than the first one.

Of course, it’s not that simple. The companies have to offer better perks, in order to justify the price variances within the more premium options. But, the vast majority of consumers won’t need the extra benefits and, just opt for the one that suits them best. (usually one of the more affordable options)