Rolling contract or fixed term contract?

[brutondave]

Hello.
I'm about to start charging new customers on my site using PayPal and was wondering if I should offer people a range of fixed term contracts to advertise their services (e.g. 1 year, 3 years, 5 years etc) or whether I should ask them to enter into a rolling contract where they are charged a set amount each year.

I can see the benefits of the rolling contract but was worried that people may be reluctant to enter into this in the first place. Does anyone have any experience of offering rolling contacts for site advertising (within directories in the case of my site) and whether entering into a rolling contract can put people off?

It seems like quite a big decision and I have no experience to help me choose which route to go down.

Thanks,

Dave

[who_me]

I have a lot of experiences in with rolling contracts, (this I hasten to add, was many years ago in a former capacity, working for a large Plc using B2B contracts to invariably smaller businesses), unfortunately they were mainly used to tie people in and rob them.

For what it's worth most people don't bother reading contracts, those that do focus on two things, termination periods and price increases;

If your contract is similar to:

"You can only terminate on the third Tuesday of month starting with the letter A, following a new moon otherwise the contract rolls over for another 5 years, oh and I can increase my prices however many times whenever I fancy"

Then yes it might put people off, but a rolling contract that;

"Can be cancelled with 30 days notice at any time and all price changes will be notified in writing no less than 30 day before they take effect"

Then no I don't think it would put people off.

You should always get contracts drafted by a solicitor, in which case you can specify what you actually want, but rolling contracts that expire on each anniversary if cancelled any time before that anniversary wont put people off, having carte blanch over what they ‘may’ have to pay during that period will.

I hope that helps?

[OldWelshGuy]

As stated above, if your terms are good then sell it as a benefit. E.G.

What we do is arrange things to roll over on a monthly/qurterly/annual basis, as this keeps me doing what i do best for longer, which is provide you with xxx services rather than me spending time sorting out invoices and chasing payments etc, which is dead time that i have to pass on in hire charges. To make sure my prices are the best i can make them, this is what I have done.

BUT don't worry as cancelling is simply a case of .....

[hostingmaven]

Hi Dave:

Why can't you give them both options? I don't know about the settings in PayPal but it seems like you should give people a choice - but maybe PayPal won't let you do this? If they like your service, they may come back and be happy to pay for a year up front.

[brutondave]

Thanks very much for the advice so far. It has definately been helpful. I feel that the best way to get repeat business and build the site turnover would be through the rolling contract route (rather than having to expend a lot of time getting new customers and effectively standing still).

My developer is looking into whether or not PayPal can achieve this. It would be a shame if it cannot as my current budget is pretty much spent on the developments taking place. If it can't do this, what other options are there that can?

[OldWelshGuy]

paypal can do this, there isn't much to look at you have two options one is an annual recurring payment (subscription) the other a monthly etc.