Subscription Pricing Strategy: What’s In a Package?

By Joe Andrews April 20, 2015

There are many components of successful subscription pricing strategies. In previous posts we’ve talked about the freemium model and determining the right price metric and level. Another critical strategy is how you define your subscription “packaging,” which is about arranging your product features into bundles that have different price points.

Consumers always make trade-offs between the options available, whether consciously or not. When evaluating a product or service, they focus on the relative price and value compared to alternatives.

LinkedIn Pricing Strategy

 

Successful companies have learned to proactively adjust the pricing strategy options they make available and, in doing so, influence what consumers buy and how much they spend.

The potential impact of restructuring your product packaging and pricing strategy is huge. Our partner Simon-Kucher has reported helping a subscription online marketplace increase average revenue per user (ARPU) by 88% and monthly recurring revenue by 62% just through optimizing their offering lineup. Simon-Kucher has just published a new article on the Zuora Academy on this topic.

We will also discuss this topic in more depth in a live webinar on April 29 with Simon-Kucher and Intuit, who will share insights from their own pricing journey. Intuit QuickBase is a subscription-based suite of cloud-based team collaboration tools and a Zuora customer. They partnered with Simon-Kucher to evolve their pricing strategy, and the outcome was a new packaging lineup that is much better aligned to their customer segments.

Intuit Pricing Strategy

Ultimately, they’ve created three simple, compelling packages that incorporate a flexible approach to customer upgrades. The story of how they got there and the lessons they learned are valuable to share with product and marketing leaders responsible for pricing and packaging.

Register today and join us for a great discussion on this important subscription pricing strategy.