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Bill in advance? Cancel mid-term? Prorate?

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Dan Kamins

03 Feb, 2010 02:28 AM

1. Is there any way to charge a monthly subscription in advance, or are we expected to provide customers a month of service prior to receiving any payment, and continue to bill in arrears?

2. If we charge at the end of each month of service, and a customer cancels 29 days after subscribing, is it correct that CG does not charge this customer anything? Would it be acceptable (and possible) for us to charge our own prorated amount using the API? Is this recommended?

3. Say a user subscribes at a $10 basic plan, upgrades to a $500 premium plan, uses our service for 29 days, then downgrades to the $10 basic plan right before their billing cycle hits. Will this user only be charged $10 for the month? If so, do you have recommendations for avoiding this, e.g. not allowing multiple plan changes per month, doing our own prorated billing, etc.?

And will the answer to any of these questions change in the near future, such as by addition of new prorating-aware API calls?

Any guidance for planning an integration is appreciated.

1. Support Staff 1 Posted by Marc Guyer on 03 Feb, 2010 02:25 PM

   

   1. The next major release will include this functionality. The goal is early in the week of 2/14.

   2. This isn't currently possible. On the short term roadmap is one-time invoices. This will allow custom functionality like building and executing a final bill.

      Depending on your fee amounts, the amount you might charge can be negligible if not damaging. If you hit someone for $10 at the moment of their cancellation, you get $10 but the customer doesn't get a warm fuzzy. The customer may have been satisfied but their needs have changed. They may have been willing to recommend to a friend until you nickle and dimed them at the end.

   3. This is certainly a concern. The recommendation is, as you suggest, to disallow plan changes during the first billing period after a signup or plan change. However, this will be solved with the next major release mentioned above. The release includes billing in advance and automatically prorating plan changes.
      

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2. 2 Posted by Dan Kamins on 05 Feb, 2010 01:12 AM

   

   Thanks for your comments, Marc. Can you provide any more details on your upcoming release so we might plan accordingly?

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3. Support Staff 3 Posted by Marc Guyer on 05 Feb, 2010 02:28 PM

   

   I've attached a sneak preview of the new options for pricing plans. This interface is changing but the options are there. As you can see, with the new options, you may bill your customers upon signup. You may also configure a plan to prorate and restart the billing cycle upon a plan change. We'll be writing some documentation to go with the release. In the meantime, we're happy to answer any specific questions you have about these feature improvements.
   

   • Picture_2.png 64.1 KB
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4. 4 Posted by Dan Kamins on 05 Feb, 2010 10:12 PM

   

   Marc,

   We want to a) have a trial period (30 days), and b) charge people in advance for service.

   I think we'd need to use the "Prorate current period" option, because otherwise our costs could get way out of hand, as our plans vary from roughly $10-$500.

   So with your new model set up like this, if we let somebody change plans, can you please explain what would happen and what they would get charged?

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5. Support Staff 5 Posted by Marc Guyer on 05 Feb, 2010 10:23 PM

   

   Plan A is $100/mo. Plan B is $200/mo.
   

   1. Jill is subscribed to Plan A.
      
   2. Jill is billed for $100 on 2/5.
      
   3. Jill changes to Plan B on 2/20.
      
      • Jill is immediately billed $200 - $50 = $150.
        
   4. Jill is billed $200 on 3/20.
      
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6. 6 Posted by Dan Kamins on 05 Feb, 2010 10:31 PM

   

   Marc,

   Can you explain how you derived the $50 in step 3? I'm having a hard time following...

   Thank you very much for walking us through this.

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7. Support Staff 7 Posted by Marc Guyer on 05 Feb, 2010 10:58 PM

   

   My mistake. I have edited the previous post No. 4 to say that Jill is billed $200 on 3/20 rather than 3/5.

   On 2/5, Jill pays $100 for the period 2/5-3/5. Since she switch plans on 2/20, she was on Plan A for only 15 days. Using a prorate calculation based on a 30 day month, Jill has received 1/2 of a month of service on Plan A since 2/5. She is credited on the first Plan B invoice for the difference.

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8. 8 Posted by Erik J. Barzesk... on 08 Feb, 2010 06:11 PM

   

   Is this still on target to be available the week of February 14? We're looking to launch our product as early as this Friday (the 12th).

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9. Support Staff 9 Posted by Marc Guyer on 08 Feb, 2010 07:05 PM

   

   We're just putting the finishing touches on now. Hoping for this
   Wednesday. If we don't meet that goal, we'll likely wait until Monday.

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10. 10 Posted by Erik J. Barzesk... on 10 Feb, 2010 08:29 PM

    

    It's Wednesday and my fingers are crossed... but my pricing plans don't show any options like the one in the screenshot above. I'm still looking to launch my service this Friday.

    BTW, how will we see when this has been implemented? Just keep checking our pricing plans??

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11. Support Staff 11 Posted by Marc Guyer on 10 Feb, 2010 08:51 PM

    

    We've unfortunately hit an Internet Exploder snag. IE is usually the last thing to get tested. We should probably always expect IE to cause a problem. Normally, it's not a big deal but this time it was significant and we just weren't able to meet our goal of noon today.
    

    We could theoretically be ready tomorrow but we make a point to not make any major releases late in the week or late in the day. This offers a chance to recognize any unforeseen post-release issues during what is normal business hours for some of us and probably the majority of our customers. Under that general policy, Friday would be the worst possible day to release and Thursday wouldn't be much better.
    

    Would it be out of the question for you to wait until Monday? If so, let's talk about what your goals are for a pricing plan configuration. We might be able to come up with a way for you to launch on Friday with compatible pricing plans and make some changes to your configuration on Monday. One of our sister companies, http://proposable.com is going to do just that.

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12. 12 Posted by Erik J. Barzesk... on 17 Feb, 2010 04:17 PM

    

    This seems to have gone up on Monday. Assuming it works (fairly safe assumption I guess), good job, and thanks.

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13. Support Staff 13 Posted by Marc Guyer on 17 Feb, 2010 07:39 PM

    

    Yup -- smooth rollout last Sunday night. If you have a CG account, you should have received an email Monday morning announcing the upgrade.

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14. Marc Guyer closed this discussion on 17 Feb, 2010 07:39 PM.