Eleven principles for pricing and presenting subscription offers

We are nearly always asked by our clients to share views on how best to price and present different subscription offers. After many years of testing every possible combination of bundles and propositions, we recommend clients consider these 11 common sense principles. 

1. Let prospects access your content in the way that suits them. If there is a format that’s less profitable, price it so it makes money. Don’t take the option away
   
   
2. Let people pay using their preferred payment method. Find out by asking a statistically valid sample of customers. Offer at least the top six payment options, which will very likely differ from country to country
   
   
3. Let prospects pay when they want. Of course you’d like everyone on annual or multi-year subs, but price those competitively against monthly instalments. Everyone accepts that instalments cost more. It’s a perfectly acceptable trade-off
   
   
4. Don’t make it difficult or tiresome to cancel. To boost sales, let new subscribers know they can cancel at any time (no refunds halfway through annual subs, though!).  Act like Netflix and think of your brand reputation
   
   
5. Don’t offer more than three options at the point of purchase. You can always upsell later to your most engaged customers
   
   
6. Don’t bundle everything you can think of into a subscription package at point of sale. Some benefits are critical to encourage purchase, but offering others beyond those that are essential will suppress sales
   
   
7. Make options clear. Something like option 1, option 2 or both together is about the level of complexity that people can absorb when making a choice. You've got milliseconds for the options to be understood. There is a reason why the vast majority of prospects give up when they view subscription offers
   
   
8. Subscribers pay for the content, not the format. So don’t develop a pricing strategy that is built cost-up from, for instance, print, distribution and fulfilment costs. Instead price based on value and never assume digital needs to be cheaper than print
   
   
9. Prospects don’t believe a “best value” label on a subscription option. They know this is simply the offer you’d rather they take. If there is an option most frequently purchased then label it as the most popular. If the most popular isn’t the choice you want people to make, you’ve got your offer wrong
   
   
10. Larger, infrequent price rises almost always end up being more profitable than smaller, frequent rises. Even a small price rise will markedly increase churn and you’ll likely end up with less profit, not more. Set any new price on the basis that you won’t raise it again for three years
    
    
11. Don’t penalise loyal customers by charging them more than new customers. Loyal subscribers may tolerate you offering a discount for  a short introductory period, but beyond that you will drive up churn. Remember how much more it costs to acquire customers than retain them!