Do you know why you price your subscriptions the way you do? Any data behind it? Using data points to inform the best pricing route for your strategy will make or break it.
Taking a recent Substribe pricing project for a new product as an example. We presented two possible strategies:
- Penetration to drive market share
- Revenue to drive profitability
Using pricing research we were able to take their website registration data and simulate what would happen if they were to target their most willing to pay prospects.
For the penetration strategy… if they priced at the lowest optimised rate they would likely convert 80% of their prospects giving them first year subscription revenues of £500k.
For the profit strategy… if they priced at the highest optimised rate they would likely convert 52% of their prospects (35% less). But this time, first year subscription revenue would be £1.6m (a whopping 326% more).
What route would you take?
Armed with this information, you can challenge yourselves on what you want to do with your eyes wide open to the opportunity. Each strategy will require a different GTM approach and it may take a less extreme route than these examples. But ultimately you have the data to inform your decisions and project results to set realistic goals.
If you want to know more about how the Substribe unlock innovation with recurring revenues, please get in touch with Steve Budd.