Subscription Pricing Consultants

Subscription Pricing Consultants—Learn How to Set and Fine-Tune Subscription Pricing For Improved Recurring Revenue with SubscriptionFlow

After the outbreak of the COVID-19, the recent economic and commercial meltdown on a scale explains why stability, predictability, and security in every business are crucial for any individual, workforce, or even for a nation. This is why, almost in every sector and industry, businesses are eager to find opportunities to offer their subscription services. The rapid adaptation of the subscription-based model is briskly transforming the landscape of commerce & industry.

Ensuring a recurring revenue is the foremost objective behind any subscription-based business offering products or services. Leaping into the arena with proper strategies towards short-term objectives and long-term goals determine the value of any business.

Starting a subscription business needs a full grip on factors like market demand and customer value. Once you have selected the niche, source the inventory, and plan the fulfillment process, next, you need a full-fledge data-driven subscription pricing strategy.

What is Subscription Pricing?

Subscription Pricing is a whole subscription business model that deploys a strategy to make the customer pay a recurring fee after every set interval for the access to the subscribed product or service over a pre-defined length of the period.

Why Devising the Apt Subscription Pricing Policy Is Crucial?

Pricing in any business cannot stay static. As per the altering strategic, economic, or social conditions and factors, the prices are revised in every business and can be scaled up or metered down. This requires constant development of pricing strategies and policies.

As subscription requires a customer to pay after every pre-defined interval the subscription charges, it is even more inevitable to devise the intelligent, dynamic, and data-driven subscription pricing strategies throughout the way.

Implementing an appropriate as well as the far-sighted pricing strategy is necessary for a stable and predictive subscription business. If the pricing for the subscription is too low, subscription businesses have to suffer a loss and may not survive for long. On the other hand, if the subscriptions are charged too much in comparison with the contemporaries, it would backfire and result in the loss of the customers and market share.

How Different Factors Determine Subscription Pricing?

Before devising and effecting the strategy, it is vital to dig deep and analyze the impacts of the following factors.

Let’s learn about them:

  • Target Audience

To some extent, every business plans its development, sale, and marketing strategy around a particular group of people, called Target Audience. Likewise, subscription businesses also target a specific stratum or chunk of the people as a target audience. Before setting the subscription pricing, the research should get all the information as the answers to the following questions:

  • Who is the target audience?
  • Where do they live?
  • What is their financial background?
  • What are their social, political, or economic needs and problems?
  • What brings them to the subscription service?
  • How do they pay the subscription charges after every interval?
  • What perks and benefits can attract them to subscribe to your product or services?
  • What could be the outcomes if you make the changes in pricing in any direction—upward or downward?

Subscription Pricing Model

Based on the niche or type of subscription product or service, every subscription business adopts a pricing model that assists them in making progress towards their recurring revenue goals. The subscription pricing model can broadly be categorized into:

Flat Pricing Model—It is a static and fixed pricing model.

Usage-Based Pricing Model—It is the dynamic and variable pricing structure that bill differently on every interval based on the consumption of the subscription services. Also called, Linear or Consumption-Based Pricing. It is a highly recommended subscription pricing model for cloud-based or SaaS subscription services. Some of its sub-types are:

    • Features-Based Pricing
    • Features-Based Tiered Pricing
    • of Users Based Pricing
    • of Users Based Tiered Pricing
    • Time-Based Consumption Pricing

Hybrid Pricing Model—it is the mix and match of the above-mentioned pricing models. It can be planned as:

    • Flat Subscription plus Overage Charges
    • Flat Subscription plus Exclusive Features Usage Pricing
    • Freemium plus Linear Pricing

Business Costs

Some subscription businesses particularly cloud-based or SaaS subscription services can get the ROI from the subscription services with a few subscriptions and their recurring payments and later turn the subscription into a profitable venture, whereas some have to repeat the cycle of investment, ROI, and profit with every recurring billing. This is why it is necessary to follow the standard method of pricing. Determine all the fixed and variable costs—from product development to delivering the service to operations to business development. Manage the fixed costs within the subscriptions. Opting the flat or hybrid subscription pricing could bring excellence in recurring revenue.

Competition in the Market

Crushing the competition isn’t an easy task. Pricing is hugely affected by the competitor’s strategy of pricing. To stay ahead of the competition requires intelligent and intuitive assistance of machine learning. The AI-based robust subscription pricing management suite fine-tuning the pricing with recommendations, suggestions, or risk detections and preventions while mining the piles of data can create a huge difference.

Life Cycle Value

Determining customer lifecycle value is crucial for customer acquisition and retention. It helps you to make data-driven decisions of investing time, money, effort, and other resources as per the revenue potential of the customer.

Are There Any Pricing Tricks To Support Subscription-Based Products or Services?

Yes. Subscription businesses are no different than other businesses except, it allows you to make your customer stay with you and pay you for as long as they want and they need. In subscription businesses, it is the foundation that will support and strengthen the whole edifice in the long run.

From introducing a product to marketing and sales to business expansion, a separate subscription pricing is required in every stage to serve the objectives of the phase.

Introductory, competitive, re-branding, or prestige phase, using these pricing strategies separately or in combination with any pricing model can help subscription businesses to penetrate, stay, and lead rapidly in a market. Let’s have a quick look at some of these strategies:

  • Penetration Pricing: It is the strategy of reducing prices to rapidly gain adoption.
  • Captive Pricing: It is used to reduce the cost of the core product but charge more other products used in association with the core product.
  • Promotional Pricing: It is the strategy to initially brand service for products for higher process and then gradually reduces the cost over time to the accrual value.
  • Free Trial Pricing: It is based on providing a free or trial of the products or services for a limited time or usage.
  • Premium Pricing: Also called prestige pricing strategy, usually used to increase the brand value of the product or service.
  • Cost Plus Pricing: It is the defined profit in percent or value + actual cost pricing strategy, recommended for the competitive stage.
  • Pricing Segmentation: It is the strategy to offer the same subscription plans of products or services to multiple customers at different rates.

Here are some of the other proven pricing engagements to trick a customer into buying a subscription plan as per your pricing strategy:

  • Price Anchoring
  • Charm Pricing
  • Odd/Even Pricing
  • Bundle Pricing
  • Trial Pricing
  • High-Low Pricing

SubscriptionFlow—The AI-Powered Subscription Pricing Consultant & Strategist

SubscriptionFlow offers 360-degree automation of subscription and billing management from price designing to product cataloging to invoicing to payment processing. It is one of the best SaaS Pricing Consultants to help your cloud-based subscription ventures to excel with the experimentation of pricing at every phase of the business.

Powered by Artificial Intelligence, its sophisticated pricing engine offers you the cloud-based solution to optimize the best subscription pricing and plans at every phase. Based on the niche, customer base, and the resources, find data-driven recommendations of pricing models and strategies. Add Freemiums, Free trials, Add ons, Discounts, Vouchers/Coupons, or many more. Manage automated, customized, and accurate tiered, consumption, or flat subscription billing with SaaS analytics real-time measurement and revising the pricing models or strategies whenever you are required to acquire or retain customers and grow recurring revenue.