How Often Do You Update Your Subscription Pricing? Never Say Never.

By Aarthi Rayapura July 30, 2014

  Screen Shot 2014-07-30 at 11.17.57 AM

 

JoeandrewsJoe Andrews

Sr. Director, Product Marketing

 

Whenever Zuora does a webinar or live event about pricing and packaging, it’s always well attended. It’s not surprising there’s high interest in the topic. In subscription businesses, pricing models are entirely different. And most business leaders are new to navigating their businesses through the changes that are required.

 

Last week we had a couple hundred people join us for a live webinar: “Your Pricing Strategy – How to Maximize Revenue With a Better Pricing Model.” You can see the replay here.

 

We covered popular pricing topics like: What are the four basic models? What are the tradeoffs between “freemium” and “free trial” models and which one is right for your business? Who owns pricing strategy at your company and how do you involve other groups to make the process more collaborative?

 

We also did live polling on some key questions – and some of the results are surprising.

1. Over 40% of all participants have not changed their pricing at all in the past 12 months and a further 35% have only made 1 or 2 changes. This suggests great opportunity for those companies to be more agile in their subscription pricing.

Changed-pricing
2. Over 21% of all participants have a “set it and forget it” pricing psychology and almost 44% are “let’s make a deal,” meaning pricing is set on a deal by deal basis through the sales team.

 

This point further suggests an opportunity to be more pro-active in determining pricing strategy with market and customer input.

 

Pricing-profile

 

3. The most popular pricing models are fixed recurring, a set price per month or year (50%) and per unit or per user (35%). A much smaller group has a usage-based model (9%). But there’s a lot of interest in evolving to a usage-based model, which better aligns price to value. But this model is operationally more complex.

Core-pricing

 

Want to see the full content? Watch it here.

 

And stay tuned for follow up webinars and articles that will dive deeper into specific topics, like freemium.