Caroline Middlebrook blogged about a topic that hits close to home and has been a burr under my saddle for some time…forced continuity marketing.
By definition, “forced continuity” means setting up a system where the consumer purchasing a product also incurs a recurring charge for some service or additional product. Usually it’s in the fine print of a sales page, or very briefly mentioned over the phone.
Direct-mail marketers selling books and CD’s used this approach with great success for years. They would offer 5 to 10 titles at a fantastic discount with the requirement that customer would accept monthly “review copies” of additional titles. If the customer didn’t want to keep the book or CD, they could simply mail it back to the publisher. Most publishers started adding minimum purchase requirements to their offers once they figured out that the consumers would purchase their discount offer, receive the next month’s offer, then cancel their “subscription.”
With the advent of the internet, the profit potential of “forced continuity” skyrocketed since, for the most part, these programs were very low overhead. In the case of a monthly newsletter or membership site, there is NO overhead involving recurring-charge customers. Whether the customer ever logs into the marketer’s site or reads the newsletter has no effect on the marketer’s cost (except a little delivery bandwidth.)
Membership sites and newsletter publishers could generate huge monthly revenues with zero out of pocket expenses! The best part for some marketers has been the ability to become almost completely anonymous.
Their offer will have a title, which in many cases not contain the marketer’s name. Titles like “best-content-club” or “top-tier-monthly-templates” or “marketing monthly” are typical. The shopping cart or credit card gateway will have a much shorter name. This could be something like “BC cnt 24″, or “CAInc01″ or just about anything else.
Your credit card statement will show the monthly charge (say $99.95) by “CAInc01″ and nothing else. If the charge was through a credit card gateway (not Paypal, or 2checkout, or PayDotcom) then there is a good chance there may be a contact phone number on the credit card statement. However, if the charge was through PayPal, or 2checkout, or PayDotCom then there’s NO contact number, and no description.
Here’s the problem. There’s no requirement that the ID on the credit card statement match anything else. The marketer’s name could be “Mark Wundurful”, the “subscription” could be called “Best-PLR-Content”, the corporate name used with the third-party processors might be “Come-Again, LLC”, and the charge is labeled “CAInco1.” With this setup, there’s no easy way to connect the dots.
Now, to add salt to the wound, the marketer will set up his autoresponder with a name like “Mark W” or “Mark W Support” or just “support”. Same thing with his support desk. None of the names match anything you’ve read or used thus far. And, believe it or not, there’s a real good chance that the “support desk” has little direct contact with the originating marketer. (It’s a “virtual” company–that could be based in India or anywhere else–who basically passes messages back to the marketer’s US-based “virtual assistant.”)
Here’s how this plays out.
- You sign up for a free 30-day trial for a membership site called “Best-PLR-Content-Club”. During the sign-up you create a username and password.
- You’re second attempt to access the membership site fails with “invalid username or password.”
- You click the link labeled “Support” on their web site’s home page, but keep getting re-directed to a static page that says contact us by email. (Evidently there’s NO support desk.)
- You send them an email, but receive no response…no bounce back, just no response.
- You send a couple more emails and get nothing back.
- Thirty days later, your credit card is billed “CAInc01″ for $99.95. Since this charge is one of over 100 other entries, your bookkeeper puts it aside to find out what’s being billed. In the mean time, the monthly credit card bill is paid.
- The bookkeeper contacts you to verify the charge and find out what was purchased so that it can be entered into the accounting system.
- Since you have NO idea what “CAInc01″ is, you have the bookkeeper contact the credit card company.
- The credit card company explains in a support ticket that this is a charge from “Come-Again LLC” but has no other information. Your request to have this charge stopped can not be handled by the credit card company because you have not initiated a “charge back” or claim a fraudulent purchase. The credit card company says contact the vendor.
- At the beginning of the next month you receive an email (from a third-party processor) that your credit card was billed $99.95 for “CAInc01″ and for questions you should contact “Come-Again, LLC.”
- You contact the third-party processor’s support desk and ask them to stop the charge and identify the entity making the charge.
- The third-party processor agrees to stop the recurring charge, but says any refund arrangements will have to be worked out with the vendor “Come-Again,LLC.” Unfortunately they do not provide contact information information. They will, however, forward my “complaint” to the appropriate party. ??
- Finally, you get an email from someone at “Come-Again.com” stating that you should have contacted their support email if there was a problem, and that their policy is NOT to issue refunds since their material could have been downloaded and used.
This scenario occurs over a four-month period (counting the 30-day free trial.) During that time the credit card company and the third-party processor play dumb. The end result is 3 months of billing up in smoke. That’s almost $300 lost because marketers can play a shell game with their information.
Joel Comm has been taking some pretty good hits lately for his latest introduction of website templates. Evidently the “fine print” was really fine because a lot of people were surprised to have agreed to a “forced continuity” program. Instead of buying a $97 template package, they were signing up for a $97 per month template membership .
I’ve read where Joel apologized for the confusion and had re-vamped his program. I think that’s commendable. I also think it’s a sign of the times. Marketers are looking for “bigger bucks” and throwing more expensive stuff against the wall. If it sticks, they’ll use it, if not, they move on to something else.
The Bottom Line
If you want to subscribe to a membership site or agree to any form of recurring billing, contact the vendor BEFORE you sign up! If you can’t reach a live body to answer questions, it’s a good bet you won’t reach anyone if you want to cancel your subscription. Over the last two years I’ve signed up for more than a dozen membership programs/sites and most of the time, it’s a hassle getting “unsubscribed.”
Your best protection is to use something like Paypal’s subscription system. At least you will have control over the billing. When you decide to cancel, it’s as simple as few mouse clicks. You don’t have to worry about going through someone’s support desk or getting a response to email (or missing the email.) You simply delete the subscription and it’s over.
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