"Out of curiosity, could these companies would have been able to pay $30+ on trials if they allowed majority of people to cancel after they found out it was a sham?"
I have a friend who sold a colon cleanse diet supplement a few yrs back. He ran infomercials on that shit.
This stuff costs about $12-$25 per bottle to make. Then you have to pay the affiliate, the network, and the rest left over is for yourself. So you end up making about $30 per bottle gross as the manufacturer. Less if you have a business partner. There is no way they could sell this shit for less than $80.
The whole reason they do the forced trial is because way less people would be willing to spend $80 on one bottle of a colon cleanser/acai pill and if people were able to cancel they would have way lower profit margins.
Not saying its right. Just stating the facts.
Depending on formulation your cost numbers are WAY too high- and most of the shit pumped out in continuity programs costs between $5-8/bottle (1 month supply) which includes product, bottle, label, and sometimes outer packaging.
It's widely known that most companies are in the red off the bat and only making it up on re-bills, some trying to fix this issue by cross-selling all sorts of other shit that fucks our conversion rates by pre-popped opt-in.
While it's true MANY customers have no idea that they're engaging in a free trial- one of the huge reasons continuity is used for products like this is the on-fence factor- thus letting the product "prove" itself "in your home" (ala Bowflex, or anything else sold on TV).
The number of consumers who send in positive testimonials saying they've been on ____ for several months are are doing great, blah blah blah is shocking to me- I'd expect that to be a once in a blue moon case- but it isn't.
Of course if you find the right companies they actually pickup the phones immediately when you try and cancel and then have operators trained to sell you back (think trying to cancel cable tv) or offer to give you a free month, another product, whatever. You can also find those willing to pay recurring revenue based on rebills (though as we've all seen from other threads apparently folks in Utah can't manage to sort the complex mathematics of doing this out).
You ever picked up a mens magazine with the "sexual enhancement" fake story in the back about meeting some girl on an airplane or traveling to asia and finding a secret? Uh- hello print version of the fake blog. This is now not okay even though they have disclaimers on that?
Bullshit.