Forced Continuity
October 27, 2008
Recently a coaching client asked me if I felt it is ethical to do a forced continuity?
My answer is most definitely as long as the continuity is made clear on the page. If you’ve clearly explained that the person will be billed monthly until they cancel, then there isn’t a problem with it at all.
Note: Forced continuity simply means that if you buy a specific product you are automatically added to monthly recurring billing of some type. It could be a physical product or it could be digitally delivered such as a membership site.
I know why they asked the question.
It’s because there has been such an uproar over “hidden continuity” in internet circles lately.
Hidden continuity is when you’re added to monthly billing without it being made clear on the sales page. For example, there are many “Free CD” offers out there. On these offers you pay for the shipping of the CD (in the pricing for most of them the actual CD cost is included as well). Then you’re automatically added to some type of monthly continuity program.
Up to this point there isn’t a problem. The problem is that the ONLY mention of the continuity billing is in one of the free bonuses. You don’t see mention of it on the order form. You don’t see any mention on it anywhere near the order link on the sales page.
If you don’t read every single word of the letter…specifically all the bonuses…you won’t know about the monthly billing.
For example, recently I came across a site that sold a “free CD” with these exact words, “Yours Absolutely Free, Without Commitments, or Obligations.”
The only mention of any continuity is in one of the bonuses. There is no other mention of this continuity anywhere else you can find. The only reason I found it is because I was looking hard for it since someone else gave me it as an example of the “hidden continuity.”
If I wasn’t specifically looking hard for it, reading the whole letter 3 times, I would have never found it.
Yet, the statement, “Yours Absolutely Free, Without Commitments, or Obligations” appeared on the page at least 7 times that I counted.
I wonder what they would consider a “commitment” or “obligation.” Monthly billing is a commitment in my book. It didn’t say “no long term committments.” It said “no committments.”
I’m sure if I asked them they would say they tested this and the current form produces the absolute best conversion percentage. I wouldn’t doubt that one bit. It’s not a question of conversion.
It’s a question of fraud in that case. I’m not a lawyer so can’t say anything on the legalities of that method, but that’s not what we’re discussing here. The FTC does have a section of their site about continuity plans.
The say the plan must be presented “clearly and conspicuously” which I guess could be interpreted in different ways.
What we are discussing is you can use forced continuity ethically in your business to increase your profits and produce better results for your clients. I commented to one other marketer this week that his CD offer needed a mention on the order form about the continuity…which he quickly added in.
Continuity plans are a BIG benefit to your business if you’re not using them (just use them ethically). In fact, every business I work with, we try to get at least one if not multiple continuity plans in place.
For example in my own business, I have the Monthly Mentor Club, Netofficetoolbox.com, and even my coaching.
What do you have in your business?
It could be as simple as doing an interview with an expert each month (which you send out in mp3 format or on CD). Or you could do a report each week you send out by email (similar to how Jimmy Brown does Membernaire.com). Or you could set up a membership using Wordpress to manage your content and Amember.com to protect it (very good membership script that’s been around for years).
If you don’t have a continuity program, get one setup in your market. Just don’t “hide” the details!
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Thanks Terry for showing us the right and wrong way to use forced continuity.
The more I learn about internet marketing, the more I realize how important continuity is to a business — any business, online or offline.
Thanks for this Terry. As you know there’s been a lot of upset recently about some rather devious uses of continuity programmes. It’s interesting to know that you use them and thanks also for the link to the FTC.
All The Best
Alex
http://www.expertlistbuilding.com
Forced continuity that isn’t clear up front is horrible! Unfortunately, there are some Internet marketing gurus that suggest you do this kind of thing and I don’t listen to them anymore. Nice post… stumbled…
Great post Terry.
Because I push my own coaching students so hard to set up continuity income streams, I’ve been able to do a TON of split and multivariate testing on different ways to present forced continuity offers.
Forced continuity, when used correctly can make a massive difference to your bottom line.
But when done poorly or when it is “hidden continuity” (which is illegal), the damage to your relationship with your list and long term negative impact on your business can be devastating.
Without naming names, there have been several high profile marketers that have absolutely destroyed their relationships with their lists (and thus the responsiveness and profitability of their lists) over the past 12 months by screwing up the way they present their forced continuity offers.
The unfortunate part is many of them made a boatload of money on the frontend, and from the small percentage that did stick month to month in the continuity. This did 2 very dangerous things.
First, it boosted their egos and made them think the “hidden continuity” tactic was a good idea (after all, look how much money they made…) But what they failed to see is the long term impact and real money cost that the loss of trust with their list and customers created.
Second, (and perhaps the biggest damage) is the dozens of other “me too” marketers who watched these so-called successful promotions and are going out and trying to do the same thing (but in most cases are doing it even WORSE that the first example.)
So often, marketers who are not plugged into a good mentor or coach (like Terry) to bounce ideas, tactics and strategies off of, try and copy what they see successful marketers doing. The problem is they are only seeing what is happening on the surface (tactics), they don’t see the real underlying strategies behind what makes successful marketers successful.
Without a good coach, even if they are trying to copy a sound and ethical system (such as TRANSPARENT forced continuity), odds are they will still mess it up and miss some major steps or principles.
But when they are trying to copy BAD or unethical systems (like HIDDEN continuity), not only does it hurt them, it hurts the entire market as a whole.
It hurts ALL marketers, because trust is not just eroded for the bone-head that screws up his offer, the customers who get burned wind up losing trust with ALL marketers using tactics that (on the surface) look similar.
So even if you are doing everything right with your continuity offer, your sales and conversions can be hurt by the negative experiences your prospects have had with OTHER marketers.
I have no problems with aggressive marketing. In fact it’s essential to test as many different tactics and strategies as you can to see what your particular market responds to best. But it is also essential to keep a long-term view, and avoid anything that can damage your trust with your customers or prospects.
With so many other marketers pushing the ethical envelope it has never been more important than it is right now to be plugged into a mentor or coach who has been down the road before you, and can see the long-term picture for any strategy or tactic you are thinking about testing.
So I encourage EVERYBODY reading Terry’s blog to take him up on his Monthly Mentor Club or coaching offer.
And just a side note for anybody wanting to test forced continuity in your own business…
From my testing, the more you actually SELL the continuity offer itself (in addition to the offer that has the continuity attached) the higher your conversion rates will be. You need to sell it as hard, if not harder than the main offer, and you should be 100% transparent with the continuity aspect.
Now I will admit that in many cases the by making make the monthly billing aspect of the offer more obvious you may see a drop in conversion rates (this is why so many try to hide it), if you continue the test long term what you will find is that you have a MUCH higher retention rate.
Because of that higher retention rate, you actually wind up making SIGNIFICANTLY more money long term with transparent forced continuity than you ever will with hidden continuity.
When selling traditional, non-continuity products online your profitability is based primarily on traffic and conversion.
But you need to shift your focus when selling continuity based offers because your profitability will be based on: traffic, conversion AND retention. I’ll gladly take a lower front end conversion rate if my backend retention increases, because I’ll make more money long term.
Happy testing!
Eric
Hi Terry,
Thank you very much for your advice, no wonder last time when I brought a product from someone who call “guru”, he always charge me when the new product was produce. This time I must more carefully. Thank you.
Semmy
http://www.myminisitegraphic.com
I was a victim of this continuity program more than once from some of these so-called internet marketing gurus. I don’t remember reading any of the clauses on a monthly billing. Some of them made it even difficult to cancel this monthly subscription with no billing statements. I dont mind monthly subscription but I want to know about it upfront, not some snicky way to hide from it.
Hope those “underground” marketers get to read this posting.:)
Hi, Terry, another great article (why am I not surprised?)
I have a few times accidentally signed up for a continuity program without realizing it. To their credit, every time it has happened, the marketers have removed the charges–but why should we have to go through all that rigamarole? Failure to properly disclose is unethical and illegal, as you mention.
And I have to say I have declined some “free” offers because I could see the continuity program attached, and it didn’t feel like it would be worth the hassle if I wanted to cancel.
I plan to release a continuity program of my own in about a year (I have very strategic business reasons for delaying it), and you can rest assured that the charges will be posted clearly, upfront.
In my award-winning sixth book, Principled Profit: Marketing That Puts People First (http://www.principledprofit.com), I write about the importance of developing long-term relationships based on trust, and the very sound business reasons for doing so. Hidden continuity destroys trust.
One step business owners can take to help build trust is sign the Business Ethics Pledge (http://www.business-ethics-pledge.org).
Great advice Terry. I posted a link to this post on my blog because it’s very important from both a consumer and small business owner standpoint.
It may not be illegal as we know it but it does border on unethical business practice.
This makes you think twice about doing business with someone who uses this type of tactic. Do you really want to do business with someone who deceives his/her customers…what does that say about how they’ll deal with a JV partner?
Thank you again for a great post.
Great article Terry.
A friend and myself almost got caught recently with “free CD for Government Grants”. But I was suspicious and had searched the sales pages with no sign of any other costs other than an exorbitante “S&H”.
From past experience I decided to go to their “Privacy Notice” which I believe all sites should have, and low and behold found the said continuity notice. I contacted the three sites to complain but got no reply.
How many web users even know there are Privacy Notices way at the bottom of the page, also known as the “very small print”.
So a lesson. Always check the sites “Privacy Notice”.
[...] superb coach, who I haven’t had a priveldge to meet yet shares insights on the latest buzz - Forced Continuity. We have seen it time and time again and I personally hate the concept even though I understand it [...]
I’ve definitely ran into my share of “hidden” continuity and it’s not fun! Seeing a charge that you had no idea was going to be there is a bad experience no matter who you are.
I have no problem with those that put it out plain and clear, I then have the choice to make on my own. But those that try to hide it and hope I forget lose tons of credibility in the process…even if they do receive some huge monetary gains in the front end.
The long term damage is much worse in my opinion, and I would think, like all “shady” or “black hat” type of methods, it’s not worth the quick payoff if you are really trying to build a long term business.
It really is important to emphasis that a “continuity program” is really a “paid membership” and just what the reoccurring fees will be.
I agree that the conversion will be lower… but every one of those conversions should be “happy” customers… not a rant about how devious the program is.
Wouldn’t this be a better way to do real “long term” business? Wouldn’t this build a better relationship with our members? And… wouldn’t we all be better off is we didn’t have to worry about “reading the fine print”?
So far all of my membership sites are opt-in after a free trial. It may be that I don’t have the highest conversion ever… but I have never had one complaint either.
I’m just saying….