Beware the Automatic Renewal Provision in Your
Website Contract
Picture it… Your dealership decided to try out one of our primary competitors and you got a great deal on a slick new website. But a year later, after several attempts to reach your web hosting provider’s Customer Support to change the email address on the “Contact Us” page have remained unanswered, you decide you have had enough – the “bargain website” is not worth dealing with the lack of support anymore, so you decide to change providers. You hire a new marketing agency provider to build a new website and when you’re ready to “flick the switch” on your new website, you contact your current provider and tell them you’re leaving. But instead of confirming your cancellation request, the host provider advises that your contract auto-renewed and doesn't end until next year.
Believe it or not, this happened to one of our new website customers not long ago. They contacted their current hosting provider and were surprised to learn they were under contract for another 12 months -- stuck with a provider they didn’t want and whose service was so unsatisfactory the dealer spent time and money hiring a new agency to build them a new website. How could this be? The dealer timed the call perfectly at the end of their existing contract. But that wasn’t sufficient notice for this agency – the dealer’s contract contained an auto-renew provision that was triggered because they didn’t provide adequate notice of termination.
What Is the Autorenewal Provision and Why It Matters?
The autorenewal provision is hardly new to service contracts. You probably have one in your contract with your satellite radio or tv service provider. It ensures continuation of service if the term expires and keeps your service live while you’re busy doing other things and not thinking about whether you want to change providers.
Where these provisions have become a nuisance is in the way they have been written such that they end up trapping a customer into renewing, even if they don’t want to renew. For example, here is a renewal provision from the General Terms of Service of one of our competitors:
The Initial Term will automatically renew for successive periods equal to the renewal period indicated in the Order Form, unless otherwise indicated in the Order Form; if no renewal term is indicated in the Order Form, the Initial Term will automatically renew for successive periods equal to the Initial Term.
This is standard boilerplate for typical renewal provisions that essentially says the term of your agreement will automatically renew for successive periods equal to the original term (or as indicated on your order form). So, if your original agreement was for web hosting and maintenance for 12 months, the inclusion of this provision will automatically renew your contract for another 12-month term from the effective date of the renewal (typically the day after the last day of the original term).
Don't Take Our Word For It
Read what some of our valued clients have to say about the NetSource Difference.
"We switched from NetSource for what we thought was the best alternative but found that our new website was not put together with the Utility/Cargo trailer dealer in mind. We switched back and couldn't be happier to have a website that is easy to edit and gives our customers the info they are looking for."
Central Trailer Sales
"We left NetSource for a year and quickly regretted the decision. The other "major" agency couldn't deliver on their promises. They lacked many features and capabilities NetSource provided as an afterthought. We are delighted to be back with a skilled team who put our marketing back on-track, helping us grow our leads and business."
McClain's RV
"We bounced around with [other] website providers ... over the past few years and experienced either content, performance or support issues until we changed to NetSource. The support is prompt and effective and the content is flexible and easy to add or edit. I would highly recommend them."
Heritage RV
"We've worked with NetSource Media for many years. They provide outstanding products and client services. The company is filled with fantastic people willing to help in any way possible."
Colonial RV
Is There Anyway to Stop These Provisions from Creating Unwanted Renewals?
Up until a few years ago, the only way to stop these autorenewal provisions was to prevent them from being part of your agreement in the first place. But many of our competitors have gotten sneaky about hiding these provisions from customers. In today’s all-digital marketplace, your work order is the only document you actually sign, and somewhere on that work order, there is likely a clause indicating something to the effect of:
The complete Terms and Conditions governing this work order can be found here
(…and the word “here” is hyperlinked to a webpage that contains the lengthy contractual terms of service for your contract.)
In the old days, you would have had to specifically sign this document, but now, we sign everything digitally and a brief mention of the complete terms and conditions with a hyperlink is all the provider needs to commit you to their terms and conditions. There’s no negotiation, no back and forth about contractual provisions. When you sign that work order and submit, you’re tied to those terms, whether you read them or not.
A few years ago, courts realized this was a tactic being used to entrap consumers into unfavorable contracts with unrestricted renewal provisions. To combat this, courts mandated that contracts with an autorenewal provision must include a provision to terminate the autorenewal. Here is the termination language found in the same competitor’s General Terms of Service:
You may terminate any Renewal Term by providing at least 30 days’ written notice prior to the Renewal Term.
That provision essentially establishes a window of time during which you must communicate your intent NOT to renew, and it must be at least 30 days prior to the renewal term. We’ve been hearing from a handful of customers that our competitors are sticking to these provisions to the letter. Essentially, you have to plan ahead to specifically notify your provider that you’re terminating the renewal, and you must do so no fewer than 30 days prior to the autorenewal. Thus, the onus is on the dealership, who may be distracted by a surge in sales or other activities important to keeping the business open, to remember to notify their web hosting provider of their intent not to renew.
At NetSource Media, we think that’s absurd!
Experience the NetSource Difference
At NetSource Media, our website hosting and maintenance agreements are simple. We do require a full 12-month commitment on the initial term of your service agreement, and we do require 30-days notice to terminate once that initial 12-month term expires, but we don’t impose egregious autorenewals. Our standard agreement renews for a term of one month at a time (essentially reverting to month-to-month after the initial 12-month term), so our dealer customers aren’t penalized with another 12 months of service they don’t want just because they forgot to terminate. We don’t want customers who don’t want us, and it’s hard for us to imagine why our competitors would – except that they’re using these provisions to prevent customers from leaving and prevent losing that revenue.
At NetSource, we genuinely care about your business’ growth and prosperity. We believe in building personal connections and meaningful relationships. You’ll quickly get to know your NetSource representatives by name. Whether you have a quick question or need in-depth assistance, rest assured that a dedicated team member is one call away. Your success is our priority. That’s the NetSource difference – personal, attentive, and committed to helping you grow and succeed.
Are you ready to see how the NetSource Difference can help your dealership?
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