It is better for a very long time to let the customer buy how they are most comfortable buying.
This removes friction from the sales process, leading to a higher and faster close rate.
Let’s take a look at Zoom. Zoom is growing > 100% at $500m in ARR, in an already well established space. It may be the most successful SMB-focused app of our current generation.
Zoom does not play games. Zoom lets small groups pay monthly if they want, and easily. No hiding the monthly option, no pricing confusion:
In fact 26% of Zoom’s customers still pay monthly, even at $500m+ in ARR:
More here: 5 Interesting Learnings From Zoom. As It IPOs. | SaaStr
Small business and individuals often prefer to pay monthly, even at a significantly higher price (e.g., often 20%+ higher). Certainly not always, but often. The money is often literally, or figuratively, out of their own pocket. Few of us like to pay rent annually, even if it were cheaper. – Read more
