The main reason to create an annual payment option for your customers is that people tend to reevaluate their purchase whenever they are billed monthly. Thus, your risk of increasing churn rate rises.
I’ve seen a lot of SaaS companies use yearly payments – slashing a month’s worth of payments off. I’ve always wondered if this was the right way to go because people usually would rather pay incrementally rather than one-time big time.
The logic behind it really comes down to reducing churn. When people pay an annual plan, they are not bothered with billing again until a year later. This reduces their tendency to backtrack their review of your product.
This doesn’t mean, however that you can finally sit back and slack off when your customers opt for the yearly plan. This is because people would give much more weight reviewing your product for the past year in deciding if they should renew their payment for the next round.
Conversioner makes this case in one of their brilliant entries:
“Choice supportive” is a term in psychology that recognizes our tendency to remember our choices as better than they might have actually been. When we look back on our purchase decisions we tend to rationalize the reasons we chose the way we did and feel satisfied with them.
Perhaps it’s high time we introduce a yearly plan with a month off with Qeryz especially now that we are just a few month’s in with a lot of features still in the backlog. At this stage, it is much more desirable for us to have users review their experience using Qeryz on a yearly basis than on a monthly scale.