Automated renewals are a standard business practice for companies that market online marketing or transaction tools, but some Realtors may not understand the reasoning behind the practice.

If you are a Realtor who uses online marketing or transaction tools such as Websites, newsletters, e-cards, school reports, exclusive neighborhood representation, Market Conditions Reports, transaction management software, and more, you may find that most of these products are only available on an annual or monthly subscription.

These subscriptions typically renew automatically, usually with plenty of warning given to the subscriber. Most companies warn subscribers when they purchase their subscription that they will be renewed automatically unless the company hears otherwise from them. Some companies will warn the subscriber a second time before renewal time that the subscription is about to lapse. The reason is simple - it's more expensive to unsubscribe a subscription that has renewed, because that involves paying tech support persons to provide the service. It's better to let subscribers know the company's policy well in advance.

Even so, a year between subscription and renewal is long enough for some Realtors to forget that they were warned that their credit cards will be popped in 365 days. Sometimes, even a second advance warning of five to seven days isn't enough, especially for Realtors with overflowing inboxes. By the time they get the renewal notice, regardless of whether it arrived well in advance or not, some agents may be upset by a renewal charge on their credit cards.

If you purchase subscription services, you can expect automated renewals. Here's why:

Automated renewals keep the subscription from "going black." No one wants to be embarrassed in the middle of a listing presentation with a Website that has disappeared, nor in front of a buyer with a wireless device that fails to download MLS listings because s/he forgot to renew a subscription. A company is going to assume that unless it hears from a subscriber, the subscriber would like the subscription to continue, and some grace period is usually given to do so.

This is a courtesy and convenience to the subscriber.

Automated renewals save money. Many Realtors subscribe to automated companies for the purpose of utilizing tools that will save them money. An e-mailed newsletter, for example, is far cheaper to send out to a farm than direct mail, but if an e-mail newsletter costs more annually than sending postcards, no one would buy the product.

Companies that make automated marketing tools are under pressure to beat offline costs for similar products - otherwise there is no incentive for Realtors to abandon proven methods of farming and advertising like direct mail and newspaper ads. To keep costs low, companies may attempt to stabilize income through subscriptions, and renew those subscriptions automatically.

Companies that create automated tools have the same costs as other companies - office space, equipment and supplies, research and development, customer support, and sales. Where can those costs be cut? If there are fewer sales people, there is less need for office space and equipment. Leaner organizations are able to pass cost savings on to consumers to attract them to using their services instead of other service providers.

The only alternative to automated renewals is more staff, office space, and equipment which would inevitably raise the cost of providing automated tools to subscribers. If the costs are allowed to go too high, subscribers rebel, and the company will fail.

Automated renewals, given with plenty of notice, are a sane and reasonable alternative to closing the doors.

Automated renewals can protect consumers from immediate price increases. By the time a company raises its prices on an automated subscription, subscribers can enjoy weeks or months of use at the old price by virtue of being in a year-long contract or more. Eventually the subscriber will pay the new price, but not until renewal time. While it is unpleasant to pay more for any product or service, price increases are a fact of life, and have to be passed along sooner or later. As with any product or service, the consumer can evaluate whether or not the product or service has been of benefit and opt to renew.

Keep in mind that housing prices, electricity, health care, insurance and other domestic consumables have gone up 7 to 50 percent or more per year, lately. These costs are also impacting online service providers, too. The days of online service providers providing free or low-cost services to the point of going out of business is over, and most are pricing their services and products much more realistically. After all, what kind of service is going bankrupt?

And, by the way, any service that you pay for monthly is going to be more expensive than an annual subscription or greater.

Automated renewals can be discontinued on request. Most companies realize there is a grey area of communication where renewals are concerned. They recognize that although the subscriber is subscribing to an automated tool, and using e-mail in most cases, that a smooth process isn't always assured.

Many subscribers don't read their e-mail regularly, or they delete messages, assuming they are SPAM or of no importance. It is many of these same subscribers who later complain that "they weren't notified" of their renewal or that their five to seven-day grace period wasn't "enough time." Reputable companies will certainly discontinue a subscription on request, but once the renewal has passed a few days, they incur a cost to discontinue a subscription. Subscribers shouldn't be surprised if there are steep penalties for late disconnection fees.

Automated renewals aren't going away. Automatic renewals are everywhere - Internet access, cable TV, cellular access, and more. Every month when you pay your bill for these services, the service provider is going to assume that you want the product/service for another month, especially if you have been given some price considerations, like free movie channels, for subscribing.

It is ludicrous for consumers to expect that these companies are going to employ sales personnel to contact them every month to find out if they want to renew their subscriptions for the next month. It is just as ludicrous to assume that online companies that make automated tools are going to behave any differently. Employing support personnel is expensive, and many calls could be avoided if subscribers would simply read their contracts and their e-mails, especially if they have been warned that communications and renewals from the company will be delivered via e-mail.

Automation is a convenience for service providers but that doesn't mean it isn't also a convenience for customers, and that is why it is a common practice on the Internet, and will continue.

Published: June 19, 2003

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