Why Marketers Love Free Trials and Re-Bill Models
Free trials and limited time offer gimmicks have been around forever, and the reason is simple… they work. With the recent rapid rise of free trial and rebill offers (acai, weight loss, government grants, biz opp) hitting the affiliate space, and their massive $40+ commission payouts, it’s no wonder all of these companies on the backend are cashing in. They are getting people for a quick buck up front, the billing them out the rear later on (some offers in just a few days!). Whether you run these offers or not, they are all still based off the marketing principles listed below.
People are Lazy & Forgetful
One of the best reasons why free trials, re-billing and subscriptions are so successful, is mainly do to the fact that people are lazy and forgetful. How many times have you signed up for a free trial, put your credit card in, got your free days… then forgot to cancel. POW! You are now on rebill. For some people, months go by and keep getting re-billed and never even use what they are paying for.
Too Good to Pass Up
Sometimes an offer just seems to good to pass up. “Act Now! Try for 30 Days for Only $1.99“. Though the testimonial (whether its real or not) seems too good to be true, the mere cost of only $1.99 to give it a try, pulls a great percentage of people in. Then before you know it… you forget to cancel, and get auto subscribed.
Inventory vs. No Inventory
One of the benefits of setting up an online business with the re-billing/subscription model, is you don’t necessarily need to hold inventory or ship anything out. There are thousands of business mentors and “make money” programs that build one platform/site and simply charge members to access the site, and bill out each month. Instead of having to provide something special for each paying member, they can just produce one piece of content, and offer it to all users. On the other side, you have all of these weight loss offers, shipping out millions of bottles for each customer, then instantly re-billing their customers every month for a new shipment. Both methods are effective and profitable.
One Time Sale = Residual Profits
Most of the weight loss and biz opp re-bill offers out there are paying in the $40+ range, but are charging less than that for the initial signup and first shipment. How can that be? Most of these companies have accurate stats that show once a customer signs up, they will cancel after and average of 2-4 months. If the supplier is able to charge $1.99 for a trial fee, then hit the user for $39 a month (and knows the average person is on board for 4 months), they are able to pay out the high commissions in the $40-$60 range. On the down side, a lot of these new suppliers are making it extremely difficult for people who sign up for the trial period, to cancel their orders and re-billing.
Though we are seeing an increase in flogs (fake testimonial blogs) and possibly a crack down on how they are used. The bottom line is that free trials and re-bills work in many different cases, and people will continue to sign up to them for the same reasons as always.
Membership business model is always a profitable way to earn money using free trail, but of course not all continuity program are good. Some are bad, and worst when you want to cancel they never reply at all.
I'm not afraid to say this, I was once in a monthly membership of Nick Marks continuity program, where every month it ship me it's newsletter, after the 2nd month, I found out the content in the newsletter was all duplicate content that can be found in Ezine Articles.com, so I go to the support to cancel my subscription.
And found out I was cheated because the support site is dead, no one is answering. I had to cancel my credit card in order for it to stop re billing me.
Look even great marketers like him also cheat, seriously I wonder how many people he had cheated so far?
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The free offers are an easy sell especially if the submission is on the first or second page. If someone has to go 5 pages deep then it starts to get harder to make the sale.
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Part of the reason the re-bill models work so well is that when the subscription invoice shows up, some people don't realize what the charge is for. If it is low enough they just pay it no questions asked. In a larger company, someone might just forward this to the accountant to pay.
There are actually scammers that do nothing but send fake invoices to companies for made up expenses. They make a killing because people were trusting enough to just pay. I think they had a note threatening to close their account if the payment was not received in 30 days.
Re-bills have gotten a fairly bad reputation. I wonder what the risks are for affiliate marketers who continue in the re-bill area.
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One of the problems with re-bills however are that some have become quite shady and make it so hard for the consumer to cancel. Some are so bad that people will call their credit card companies and cancel their card.
And you are right they still work great, the word "free trial" is magical
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Them rebilling issue is the one that makes me loathe to explore the $1-99 baiter material. There are plenty lemmings out there that do buy in and deservedly get parted with their money. Quality introductions make this barrier disappear though. Food for thought, indeed.
I enjoyed this article alot. Subscriptions work the best!
Dinono.com
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Residual profit is what people always go for. Like you said work once and for all. But it would be a task to get that rebilling going tho..
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I read this article when you first published it, and have struggled with this very issue over the last few days, and am now wondering if I can promote those re-bill offers. All they do is prey on folks looking for a quick solution to something (money, weight loss, take your pick) and then you have those that make it hard to cancel. Not to mention that most of these products are just shady to begin with.
This brings up a question. Can you still make good money online using just strictly revenue share affiliate programs?
But isint this unethical? Not the way to do business if you wear your heard on your sleaves.
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No one can resist something free that could benefit them.
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the rebill business model does base itself on the fact that people aren't organized enough to remember when they will be rebilled. Rebill is a business model that can be applied to alot of different things, not just affiliate marketing. its just the products/services that don't provide value to the customers that give them a bad name. it also doesnt help when customers call and are given the run around when trying to quit the trial or membership.
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Who wouldn’t grab the opportunity of free trials? It’s the word “free” that attracts people to try a particular product or service. If they love what they’re offered or forgot to cancel, then it’s an advantage to the seller. It’s instant profit to them.
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You make the big bucks while the people you referred are losing money by buying something that has no meaning at all or they just forget you unsubscribe 🙁
-Mike
Been there done that.. as a matter of fact, I bet I have a few subscriptions right now that I have been too lazy to cancel lol.. Time to go check my paypal.. thanks 🙂
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I think your first reason is the answer of every question. People are lazy and they do not want to digg their inbox. Instead of that they asked the seller to do all stuff for him again.
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Yes this is very much true. I had these kind of habits as well. But at last I saw that these kind of habits are effecting my business hence I changed whole model and now everything is systematic and in proper way.
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it is a nice post with have a nice topic.keep it up…
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Free trials are a great thing. It's like test driving a product haha. I think of trial offers like PPC advertising. Companies are paying for people to sign up for trial offers and try their product. If they like their product then the company makes a good amount of profit. But if the person doesn't like their product and tries to cancel the trial offer the company will usually offer a better deal or discount or they just lose that customer. But out of so many customers there is a percentage that stays. (the conversion rate) Just like in PPC.
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