Redefining Continuity Programs
After the recent ‘Matt Bacak retirement offer’ fiasco, there has been a lot of discussion around the concepts of continuity programs vs. forced continuity vs. hidden forced continuity.
I’ve noticed that many people – marketers included – have different ideas what each of those actually mean. The discussion usually starts with talking about the negatives of “hidden forced continuity” but soon becomes encompassed in the general envelope of “continuity.”
But there are very distinct – and important – differences between them.
Here, let me explain…
I asked the following question on twitter this morning:
“What is YOUR definition of A) Continuity Program and B) Forced Continuity?”
While I received many different answers, I think Andy Erickson ( @andy_erickson ) responded with the most succinct, and most popular, one:
“A) continuity = recurring charge until you cancel. B) Forced = you cannot order w/o being enrolled in continuity”
I agree with these definitions… for the most part.
Before I can tell you where my thoughts differ, I should probably expand on those definitions first.
A great example of a typical continuity program is your local print newspaper.
You can pick up a newspaper in any convenience store without having to subscribe – you can get the product without being “forced” into subscribing. You can, however, opt to subscribe instead.
An excellent example of “forced continuity” (as defined above) is the uber-popular infomercial phenom – the acne medication Pro-Active.
You cannot purchase Pro-Active without automatically being enrolled in a continuity program. You have to actively opt-out later. (Side note: Pro-Active is very clear about this in their infomercials. You know damn well what you’re getting into - there is nothing shady or unethical about it.)
Of course, “Hidden Forced Continuity” is extremely rare… because it is also illegal.
Granted, there are some marketers try to take the “not entirely obvious continuity program” route and skirt the limits of the law. The “continuity aspect” of their offer isn’t exactly hidden, but it isn’t exactly clear either. That practice pretty much sucks ass in my book.
The more I think about it, the more I feel the phrases “continuity program” and “forced continuity program” are inaccurate. More accurate terms would be “opt-in continuity program” and “opt-out continuity program”, because that is the primary difference between them.
Okay, so now that we’ve cleared up the definitions of the various types of “continuity offers”, I’d like to revisit the concept of “forced continuity.”
In a previous post I talked about “forced continuity” . Let me just expand on that here, ok?
The phrase Forced Continuity applies in two different situations:
A) A situation where, upon implementing or integrating a product into your business (or life), the cost of leaving soon become exorbitant when compared to the cost of staying.
B) Upon purchasing a product or service you’re obligated by contract to recurring costs for services.
Here are some good examples of forced continuity that fit those definitions:
Google Apps: There is an annual recurring fee, and once you’ve integrated your business into the system (email and collaboration), it becomes a total pain in the ass to leave. It has become part of the way you do business. The cost of leaving is both financial and “intangible.”
Hosting Companies: I don’t think this one really requires any explanation. Anyone who has attempted to migrate from one hosting company to another knows the pain, cost, and frustration involved in this. Unless you’re getting totally hosed, or the support sucks to the point of being criminal, it is often cheaper and less frustrating to just stick with them.
Software with “service agreements”: In the PetroChem industry it is not uncommon for a company to develop a very valuable piece of software they practically give away for free… but the client must agree – for a defined length of time - to use trained personnel from the company supplying the software.
Software with “Support Agreements”: It isn’t uncommon for someone to develop a killer script and then charge a minimal monthly “support service fee” to keep the software running up to par… and by default; your business.
Products with “Maintenance Agreements”: A good example would be copy machines. You buy a copier and sign a maintenance contract with the supplier. Often times, to incentivize the maintenance contract, you lose your warranty if anyone OTHER than the supplier performs the maintenance.
Cell Phone Contracts: Grrrrrr. KILL, KILL, KILL. Need I say more?
Anyway, I’m sure, with the examples I’ve provided above, you can see the differences in “opt-in continuity”, “opt-out continuity”, and “forced continuity.”
While ‘opt-in’ and ‘opt-out’ are great models, there is no question that ‘forced’ is, by far, the best model.
Designing your product or service to become a fundamental part of the purchasers business or life is smart - very smart.
Designing a front end product that lends itself to requiring ongoing support is also smart – very smart.
If you design your business/product this way, and the offering tons of free (or inexpensive) integration support, you’re essentially forcing your customers to continue doing business with you for a long time to come.
That model is so much better than constantly trying to find new customers or clients, isn’t it?
And, with forced continuity, as long as you continue to deliver quality services or products, and don’t getting cocky or sloppy, you’ll barely have to worry about attrition at all.
Stable recurring income kicks ass.
Thanks for reading.
Please share your thoughts, ideas, comments, or how much you hate me in the comments below.
Sean
UPDATE:
After writing this, I had the pleasure of reading Dr. Mani’s blog post titled ‘Forced Continuity - Great Concept Stupid Implementation’.
In his post Dr. Mani talks about another recent “Hidden Forced Continuity” occurrence involving Joel Comm (one I was unaware of.)
Dr. Mani is much more eloquent than I am, and his post is a great read - go check it out.
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Granted, there are some marketers try to take the “not entirely obvious continuity program” route and skirt the limits of the law. The “continuity aspect” of their offer isn’t exactly hidden, but it isn’t exactly clear either. That practice pretty much sucks ass in my book…… SO very true.
Marketing on the net is becoming more and more difficult due to the fact that people are getting burned more and more by these types of programs “offers” what have you..
If you are a decent person and a trusting marketer and provided REAL value.. WHY even attempt such a thing??
Why risk your reputation for a few bucks now… because in the future it WILL come back to bit you in the ass guaranteed!
I can tell you that not only has one large guru lost a lot of respect from me but they have also lost a customer and affiliate promoter. Now perhaps this doesn’t mean much.. but I KNOW I can’t be the only one here.
Anyways.. sorry for the rant.. just in a ranting mood!
Hey Elle,
Thanks for taking the time to comment - I appreciate it.
Also thanks for emailing me the link to Dr. Mani’s post. I’ve updated my blog to send people that direction. Kudos for the heads up.
I still go back to the BMG music service concept. No one ever complained about it then… except maybe some parents who didn’t realize what their kids were getting into… it just goes back to the concept of “make sure you read EVERYTHING”. If you don’t, you might get trapped. I worked in an office where people never read any of the information we sent out to them, causing them to miss deadlines on a regular basis. We notified them and it didn’t necessarily cost them money, but it cost them their precious time and they were pissed.
Is it our fault? No. I’m of the opinion that if you ever sign up for -anything-, make sure you read (or at least skim over the entirety) what they send you. Or… don’t sign up, save yourself the trouble!
Hi Sean,
Granted, there are some marketers try to take the “not entirely obvious continuity program” route and skirt the limits of the law. The “continuity aspect” of their offer isn’t exactly hidden, but it isn’t exactly clear either. That practice pretty much sucks ass in my book…I totally agree!!!
The danger is it’s one more red flag for the industry. The more times the flag goes up—the more consumers that get burned—the closer the day comes that the FTC will step in and start cleaning house.
Of course, in theory– the house cleaning won’t hurt the legitimate business people. In practice — it hurts everyone. Wastes time and usually money complying with their rules. Legitimate business owners often comply already in their daily business practices—but once the bureaucracy gets involved the only way to comply is to do it *their way* to the T.
The whole thing just tarnishes the industry and makes everyone trying to making a living within it look bad.
My rant for the day…
Hi Sean,
Enjoyed your rant and also read Dr. Mani’s - thanks for the link. I know that the continuity program was not mentioned on the order form originally, as Dr. Mani wondered. I got an email from Joel, 2 days after buying the Adsense Secrets ebook and here’s what it said:
“We have added a line item for the report to the
shopping cart so as to avoid any confusion. This
allows customers to opt-out of the continuity
program should they wish.”
A lot of complaints and a lot of chatter (I heard about it on Twitter, too) got him to make it right.
That’s a good thing… power to the people!
Michel Fortin made some very valid points regarding forced continuity programs in his new blog post here:
http://www.michelfortin.com/forced-continuity-a-different-perspective/
The part I was most draw to in the post was when he talked about being a blessing in your customers life and your obligation to them…
Like I said, go check it out.
Sean
Great post Sean. Actually gave me some good ideas.
Guess you can attribute one positive aspect for the Joel incident is that he let people know. Although it was too shady to not have it more clear in the first place and seemed to only address the situation AFTER people voiced their concerns.
From what I understand Matt never did and was upset he had to add it in the sales page.
My other “problem” with some of these forced programs is that you have to get on the phone and call to cancel. We know they do this on purpose and for a reason. That reason being, to try and talk you into staying or make it more difficult to cancel. Why else would they pay staff or a call service? Not to mention how many folks would not want to even go through the hassle in the first place. There will also be people that will be afraid to call or many that will be push-overs if done correctly.
Ron Killian
Thanks for the clarification on forced continuity - I think one of the biggest things is that marketers need to let the buyer know that it is forced continuity, rather than just trying to sneak the payment in.
Sean