Pricing Strategies For Small Business
There are many different pieces to a pricing strategy for subscriptions, and there are numerous types of pricing strategies to choose from. This means that, as a company, you can select from the many different methods offered in order to make your company fit the mold that you want. If you’re looking to give out a lot of different discounts, you can do that with one strategy.
If you want to reward those who purchase large amounts of your products, you can do that as well. There are endless ways you can use to create pricing differences for different people.
A special offer is a type of deal or lower price that is offered for a specific reason for example discounts, coupons or time of the day. There are many different ways to use this, which includes allowing everyone to receive a special price and or selecting only specified groups for special pricing.
- Time of the Day: Under this strategy you would offer different prices at different times throughout the day. Therefore, a certain article or a certain subscription may cost one price at 5 a.m. and another at noon.
- Discounts: These are special prices whether they are for a set period of time or a set group of people. You can also decide to set a discount on certain services or levels of subscriptions.
- Coupons: Just like the traditional paper coupons that you cut from the newspaper, these coupons give you a discount only if you have the code or the special flyer. You can send them out through social media or send them to certain customers.
- Early Bird: An early bird discount gives a certain number of people a better price than others. For example, you might say that the first 300 people to sign up for a certain article will get it free or at a reduced price or they might get a different article for free with a certain purchase.
- Loyalty Pricing: For this process you can choose to give out points to preferred customers and then allow them to use those points for subscriptions or purchases or you could give your existing customers better deals or coupons.
- Rule-Based: This option allows you to select your own pricing strategy and your own methods for giving out discounts. That way you can give discounts to select people or for select products without having to specifically define it through one of the other subscription methods.
- Bundle: Through bundling, customers save because they get multiple services at a better rate than if they bought each one separately. They could get a subscription with an added feature or they could purchase multiple articles together for a better price.
- Preferred Customer: These types of discounts go to only select groups of people. They are for existing customers or returning customers. Anyone you want to reward for their continued support can receive these types of discounts.
Choosing Your Pricing model
This type of pricing strategy allows the customer to choose a specific tier of payment. They may be able to opt in for a basic package or they may be able to create their own price completely in order to lower the amount they need to pay and only get the services that they want.
- Tiered Pricing- With tiered pricing your customers can select different levels of plans or packages where the more they buy, the more they actually save. So you’re giving them an incentive to purchase even more.
- Variant Pricing- This is the use of different tiers in your subscriptions. For example, a basic subscriber might get access to a certain number of articles per month while a platinum subscriber gets access to everything. The customer gets to pick what they want.
- Feature Based Pricing- For this method the customer gets to choose each individual thing that they want and pays per piece. So they might pay a fee for each service that they want and not have to pay for others.
- Usage Metering- This is somewhat like a pay-per-view. Your customer gets to choose what they want. So when they go to an article they like they can purchase it. But they only pay for the ones that they actually view and not an entire package for the month.
- Price Personalization- With this method your customer can choose how much they want to pay and you give them a set amount of features or articles for that price. They don’t pay more than they want and you get to choose what that entails.
- Elastic Subscriptions- This is one thing that’s important to many people because it allows them to make changes whenever they want. So if they want a higher plan, they can change and if they want a lower plan, they can change to that as well.
- Just-in-Time Pricing- This method of pricing changes the price of each piece offered. So if you have an article about a big issue you might lower the price after some of the novelty has worn off and less people are interested.
These types of subscriptions charge an amount to the user when the product is used. For some, this may be a pay per month subscription where the money is taken automatically at the beginning of a new month. It may also include paying for select features outside of the normal plan.
- Recurring Frequency- With this type of subscription your users will be billed every month for their subscription. They get to pick the package they want when they first sign up and then the subscription automatically renews.
- One-Time Purchase- Here a customer can purchase an individual article or an individual piece of information. They don’t have to buy a package or an entire set of information. They pay per piece they want.
- Term Based- This is a type of special where you might give a customer a better price for a set amount of time. For example if you normal fee is $20 per month you might let them lock in at $15 per month for one year.
Free use methods of subscriptions allow customers to use certain features without needing to pay for them. This doesn’t mean that the entire subscription is free or that the user is allowed to access all information as much as they want completely free. There can be certain rules or restrictions however, they will be able to access at least a few things to get an idea of if they want a subscription.
- Trials – These are great ways to get people interested in your subscriptions in the first place because they’ll be able to try out some of the content before they have to spend anything. This way, they can see why your information is so great and why they want it.
- Freemium – With this strategy you would give out some of your content free. This might be older content or something that less people are interested in just so they can get an idea of what you have. Then if they want more they pay for it.
Just like with everything else there are fees in with subscriptions as well. Your customers are paying for a specific service after all. So if they go over the limits of that service they can be charged more money. These billing options define how you could go about that.
- Threshold Based Billing-This gets tacked on with one of the special packages. That means when your customer purchases a set package they have a set amount of services and views of certain information. If they go over that amount then they get bumped up to the next bracket.
- Overage Pricing-This method will also get added on to a package. If your customer goes outside of their limits, they would get charged an added fee. For example, if you go over the limit on your cell phone bill you get charged for each minute or each text. That’s what this method would do for your customers.
Keep In Mind
Of course, whenever you create a subscription-based product you need to remember a few different things about that subscription. These are features that will help to promote you as well as ways of allowing your customers to make changes or additions to their account. These are very important to include in your strategy.
- Go Social- You should definitely remember the ways in which social media can help you to network and reach new people and also to send out discounts and specials.
- Terminations- Make sure you keep in mind the ways in which people can terminate their subscription or even manage changes to their subscription. These should be simple to do so you can keep your customers happy.
- Partner Pricing- With this method you won’t have to do all the work. That means you can get someone else to keep track of some of the steps in your subscription methods while you concentrate on other things.
Qode Media Editorial Team