81% of our customers chose monthly. Then switched.

At the end of last year, our customer base was:

• Monthly plans: 81% of customers, 64% of revenue

• Annual plans: 19% of customers, 36% of revenue

We offered a standard 20% discount for annual. Most people took monthly.

Then we looked at what happened over time. Of the customers who started monthly, 34% eventually switched to annual. Median time to switch: 7 months. And the switch rate was heavily concentrated: customers who had been active for 6+ months switched at 51%, customers under 6 months switched at 4%.

The insight: annual is not a purchase decision, it is a retention signal. People switch to annual after they are already committed. Asking for it at signup is asking too early.

We moved the annual upsell from the pricing page to a day-120 in-app prompt. Annual mix went from 19% to 31% of customers over two quarters, without changing the discount.

At what point in the customer lifecycle do you ask for the annual commitment?