Category Archives for "Pricing Experiments"

How to Choose Your Subscription Pricing Model

Pricing can make or break a subscription business. Obviously, you can’t just pick a number out of a hat. You need to make sure that you’re pricing in a way that allows for sustainable business growth, while also enticing customers, while also not leaving any money on the table. Where should you start and what do you need to consider to protect your bottom line? Read on to find out: Pricing vocabulary: plans, formulas, and more, oh my! Before we dig in too deep on the subject of pricing itself, let’s lay some groundwork for subscription-specific price terminology. There are a few different terms to know: Pricing formula, which is the way in which the price for a subscription is […]

Strength in Numbers: Choosing the Best Pricing Structure for Your Business

Choosing a pricing formula is one of the first — and most important — steps when creating a pricing plan. If you’re a new subscription business owner, it’s easy to assume you need to use something like “$X a month for Y product.” It’s simple, intuitive, and it works well in a spreadsheet. However, there are other options that may fit your business model better and result in a healthier bottom line. In addition to understanding the basic pricing formulas available, you need to know how to combine those into a value-based pricing structure for your subscription business. The most common pricing formulas are: Fixed fee Flat rate Volume Stairstep Tiered Fixed fee Fixed fee pricing is probably the pricing […]

How to Optimize Your Prices to Increase Subscription Revenues

Many subscription companies simply set a price and start selling their products ASAP. That’s great when it comes to getting an MVP out the door — but it can also leave a lot of money on the table. Whether it’s price plans that let you charge more for more features or lower-priced plans that can prevent voluntary churn, there’s a lot to experiment with. Along with reducing involuntary churn, tweaking your pricing is another area that can produce tremendous returns. Successful companies like Buffer have taken seemingly-drastic steps towards price optimization in the past. At the 2016 SaaStr Conference, Buffer co-founder Leo Widrich spoke of their decision to double Buffer’s pricing. They had no idea what would happen, but they […]