Customer Success Leadership Community

Switching customers from monthly to annual billing

  • 1.  Switching customers from monthly to annual billing

    Posted 01-13-2021 13:23

    Hi there! 
    Wondering if the community has any tips or tricks for communicating with clients on switching their billing from monthly to annual!

    We're in the process of migrating our customers from an old classic version of our software to a new cloud based subscription model and the first step is a new order form - which will be switching them from monthly to annual billing - some mid cycle.  CS is a fairly new function at our organization, so I don't have any history or relationships with a lot of these customers. 

    Would love any insight or input from anyone who has gone through this before - either the migration process from an on-prem to cloud and/or the conversion of monthly to annual billing. 

    Thank you in advance! 



  • 2.  RE: Switching customers from monthly to annual billing

    Posted 01-14-2021 07:31
    We have made this a part of our customer journey from the onset.

    95% of our clients sign up monthly to start. We tell them on the kick off that our goal is to get them switching to annual payment once they see value.

    Why? Because we offer a discount for annual payment of 15% off.

    So we:
    1) Tell them up front this is our goal once they are happy
    2) Automate this outreach

    Once a customer has reached desired outcome we have an email cadence that goes out reminding them of the annual discount.

    Jordan Silverman
    Vice President of Customer Success

  • 3.  RE: Switching customers from monthly to annual billing

    Posted 01-14-2021 09:31
    Hi, Andrea - I don't have a ton of experience but for those customers of ours that are still on our legacy, monthly billing we take the following approach:

    • Dear customer, we no longer offer monthly billing.  Based on your monthly subscription, here is your annual order form.
    • Very basic, matter of fact approach.  Some folks don't want to move and we are comfortable with the churn (monthly billing customers are super, super low ACV and are customers that have been around for a while)

    Brian Hartley
    Senior Director, Customer Success

  • 4.  RE: Switching customers from monthly to annual billing

    Posted 01-14-2021 14:21

    Hi Andrea,

    If I had many customers and had no sense of how this is going to work out for me, I'd try something like this (if there's time to do this move): 

    1. I would segment customers into those that are most valuable to you and the rest - might be based on ARR, or # of years they've been customers, or how well they are set up (some kind of health metric), etc. 

    2. I would get on calls with 10 customers from each segment with my messaging to understand how they react, and fine tune the messaging so it works better.

    3. I'd plan giving news that can upset them alongside news that will make them happy. Usually works better to give something and then take something. 

    4. If the number of customers is limited, and there's a huge opportunity ahead of your company, I'd try to give a deeper discount to these existing customers since looks like you can't grandfather them in any way. If you give 25% off it may be a no-brainer for most of them and they aren't going to complain as much.

    Hope these tips are useful!

    Srikrishnan Ganesan

  • 5.  RE: Switching customers from monthly to annual billing

    Posted 01-15-2021 10:54

    Hi Andrea,

    I am in agreement with Srikrishnan. It really depends how many clients you have and in what segments. Here is an example from my experience going through this process:

    At the time, my company was only offering a month-to-month subscription, and I realized that if a key account churned we would be losing substantial revenue. Our goal was to get all accounts we couldn't afford to lose on annual contracts, luckily we were incentivizing them with a 10% discount.

    After 'pitching' the annual contract option to several mid-market accounts, we honed in on the language and the specific benefits that would appeal to our clients and used that in the high-level discussions with our top-tier accounts.

    For the remaining accounts, too small to warrant a CSM, we created an email campaign to raise awareness of the annual contract option. Actually one of my coworkers that worked on this posted it to her portfolio website here:


    Ben Wanless
    Customer Success Manager / Operations
    SoftBank Robotics
    San Francisco CA