What is the issue?
There is 2 month's notice.
If you have bad services and customer don't need it any more makes sense to allow termination, instead of contining to bill customors for nothing.
This is more healthy and would push more SAAS to focus on Sales not building tricks to force retain customers!
This is wonderful, occasionally the EU bureaucracy gets something right
Yes it’s good for customers, but it’s also good for vendors. They are no longer subject to this arbitrary and destructive pressure from investors, and may see a revenue increase as customers lower the bar for signing up
The right measure of ARR is statistical anyway. Just because a contract lasts for a year in no way establishes the contract as recurring. It has been a very arbitrary standard
Limiting notice period to two months and forcing you to give customers the possibility to terminate at any time is not killing ARR. It might moderately increase churn but even then, unless you are frankly dishonest, not that much.
You still have ARR when your customer can terminate their contract.
Even yearly discount which the article presents as done for are still a thing with the possibility of early exit. You just put a clause indicating that the discount is forfeited if the customer leave before the end of the contrat. Phone companies do that all the time.
As a user, this is great news. I think that the artificial lock-in to services that have near zero cost of on-boarding and off-boarding is not what nice companies should do.
As an entrepreneur, this is amazing news! This means users can now more easily switch to my superior service.
At least this is how I choose to see it. It seems to encourage healthy competition and I'd rather compete on the service quality and value than the cleverness of my contracts and discounts. I'm sure it will hurt the bottom line of some companies, but I'm not sure it's a bad thing.
Offering a discount for longer contracts and jacking up the price for shorter contracts have no noticeable difference to either party.
I feel like this article is thus being overly generous. The EU simply wants consumers to be able to cancel digital products that have no marginal cost anyway, which makes intuitive sense imo.
30% of the corporate blog links on HN the last 4 weeks have mysterious distance from the facts they purport to relay.
Then, they pivot to something vaguely related that is more fun to talk about.
The distance is never closed, and then you're hit by the ur-slop: "That's not X—its Y" and realize where we're at: it used to be a good idea for SEO to write informative blog entries, then it got outsourced from subject matter experts to marketing, then it got delegated to the interns, then the interns got told to use an LLM. And I love LLMs! Just makes me smile and wish for a new way to run links sites.
I wish EU (or may be just a Swedish thing) also could have same kind of cancellation possible for post-paid phone/ internet, eye-glasses subscriptions.
So, can I use this against Google to get our locked-in annual gmail subscription nuked in 2 months, instead of next May when the contract change date is?
If a company offers a discount (or not) for a longer minimum term contract and you accept then that's just liberty in action as long as the terms are made clear in advance. There is neither a need nor benefit in regulatory intervention, especially considering all the actual issues on Europe's plate...
Wow, companies being forced to provide good service to customers through a contract term and upholding the primary driving force of market capitalism (customer can take their money to a better provider).
39 comments
[ 0.24 ms ] story [ 42.7 ms ] threadThis is more healthy and would push more SAAS to focus on Sales not building tricks to force retain customers!
Yes it’s good for customers, but it’s also good for vendors. They are no longer subject to this arbitrary and destructive pressure from investors, and may see a revenue increase as customers lower the bar for signing up
The right measure of ARR is statistical anyway. Just because a contract lasts for a year in no way establishes the contract as recurring. It has been a very arbitrary standard
Maybe we need more regulation to require a grace period after a failed payment...
Limiting notice period to two months and forcing you to give customers the possibility to terminate at any time is not killing ARR. It might moderately increase churn but even then, unless you are frankly dishonest, not that much.
You still have ARR when your customer can terminate their contract.
Even yearly discount which the article presents as done for are still a thing with the possibility of early exit. You just put a clause indicating that the discount is forfeited if the customer leave before the end of the contrat. Phone companies do that all the time.
As an entrepreneur, this is amazing news! This means users can now more easily switch to my superior service.
At least this is how I choose to see it. It seems to encourage healthy competition and I'd rather compete on the service quality and value than the cleverness of my contracts and discounts. I'm sure it will hurt the bottom line of some companies, but I'm not sure it's a bad thing.
Choose.
Can't wait for "capitalists" to speak up against this.
I feel like this article is thus being overly generous. The EU simply wants consumers to be able to cancel digital products that have no marginal cost anyway, which makes intuitive sense imo.
Then, they pivot to something vaguely related that is more fun to talk about.
The distance is never closed, and then you're hit by the ur-slop: "That's not X—its Y" and realize where we're at: it used to be a good idea for SEO to write informative blog entries, then it got outsourced from subject matter experts to marketing, then it got delegated to the interns, then the interns got told to use an LLM. And I love LLMs! Just makes me smile and wish for a new way to run links sites.
If a company offers a discount (or not) for a longer minimum term contract and you accept then that's just liberty in action as long as the terms are made clear in advance. There is neither a need nor benefit in regulatory intervention, especially considering all the actual issues on Europe's plate...
Sounds like distopia! /s