SaaS Anti Pattern — Not Allowing Downgrades/Cancel Through Your Dashboard

Chetan Kapoor
Sep 7, 2018 · 4 min read

Just imagine you went to your favourite brand's physical store. You look around, check out a few products. Maybe you really liked a product and ask around for some help with specifications etc. Suddenly you remember it is almost the end of the month and you rather not give in to the impulse of buying anything at this point in time. You head out towards the exit…….suddenly one of the staff members from the store stops you and tells you “Sorry mam, you cannot go out like this. You need to tell us what is wrong with the product you were about to buy, we deeply care about your experience and hence we cannot let you go until you tell us the reason you decided not to buy and the staff insists that you provide the reason”

I doubt you would ever go to that store again. If you agree then why in the world you ever do it to your customers online? Makes no sense, but you see this behaviour/pattern peddled often.

Now some people would get technical about the example I gave. As in Offline equivalent of Downgrade would be people who buy from you and want to return a few items that they bought (not all the items but only some of them). This is kind of thinking that can lead us down a very dangerous path when building a SaaS company. This reflects a typical product mindset that is no longer valid as the paradigm shifts towards services. In the new paradigm, “All Sales Are Final” is no longer a valid mental model. Everything is organised around the customer. Below is how the new paradigm looks(Figure on the right).

Everything revolves around the customer and what is right for the customer. You start with the customer and then build everything around that.

If all this is so simple then why is this anti-pattern so alluring? and why do so many smart companies fall into the trap? Let’s examine this systematically.

  1. You should get them to contact you if they want to downgrade their subscription so that you can figure out the reasons for their downgrade and take some corrective action to prevent such cases in the future. — The intent here is to take feedback which is a very valid intent but what bothers me is the use of the phrase “get them to contact you” this sounds like a trap for the customer. Well, you can for sure downgrade, but first, you need to contact us. How? Call? Email? While taking the money you were smart enough to understand instant gratification, only to conveniently forget about it when it needs to flow the other way? SaaS has irreversibly transferred the power dynamics in favour of the customers and any attempt to fiddle with it can backfire. It is better to embrace the new reality.
  2. It is hard to spec and engineer. What do you do with the data that was added to the system as part of the pro features, which are no longer available in the basic feature? — This argument is little more humble in a way that it acknowledges the need, but tries to highlight the challenges. By no means, this is non-trivial to engineer, but given the huge paradigm shift underway(Product to Services) it is a worthwhile investment. If overcome this can unlock immense possibilities for growth and experimentation across the company.

On the positive note, there are a lot of examples of the companies who have made a successful transition to fit into this new reality. Notion, Netflix, Invision come to mind. They do a great job of making sure the user gets to pick the subscription plan that works best for them as per their needs and they recognise the fact that the needs are dynamic.

As a SaaS provider, what do you do? First, it is important to recognise the correct map for the destination where you want to go and then systematically plan to get there and be cognizant of the fact that the map is not a territory and at the end of the day every business is unique and all customers have unique needs. Think win-win. A win for the customers, win for your business.

P.S California’s recent Senate Bill 313 makes it much simpler and easier for consumers to cancel/downgrade their subscription services. Among other protections, it stipulates that:

“A consumer who accepts an automatic renewal or continuous service offer online shall be allowed to terminate the automatic renewal or continuous service exclusively online.” Full text here.

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Software is eating the world. I decide what goes on the menu.

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