There are many monetization models if you want to set up a project. One of the best known is the freemium (“ free + premium ”) in which you seek to attract many users by offering your platform at no cost, betting that some of them contract a paid service.
There are significant drawbacks to this model. You need a very large base of users so that the small percentage of clients helps you to get a profitable business.
3 Criteria to Differentiate the Different Subscription Models
In a freemium model, you run the risk that the Ireland B2B List high cost of infrastructure to offer a free service will make it very difficult for you to break even. An alternative is to bet from the beginning on a payment model.
When you create a payment model it makes sense to offer different subscription models. Typically there are 2-3 options that differ in price.
Contract duration : a contract of longer duration eg “annual” versus “monthly” usually rewards the user’s commitment with a lower cost per month. The idea is to find an incentive to decrease the casualty rate.
Higher level of service – A differentiation in price can also be justified with different levels of service. The more value you pack into the package, the more you can ask for in this subscription option.
Client type : Some models are differentiated by the type of client. Sometimes a company pays more than an individual. There are also differences in purchasing power, so students or other groups sometimes pay less.
How to Increase the Value of a Subscription Model When You Launch
When you create too many subscription options, it can create confusion. Put yourself in the shoes of your potential client. The more extensive the restaurant menu, the more lost you feel. An optimal number is 2 options and the maximum is 3. The perceived value can be increased with small details.
1. Registration date : when you launch your project, reward those who register from the beginning. They run the highest risk because no one yet knows if what you offer is really good or not. The easiest way is to offer a reduced price.
2. Add external services : if they don’t know you, associate yourself with other services that already have a history and a positive image. In an ideal case the subscription is already worth it even if the main service is not good. At Quondos.com we have gained access to paid SEO tools for 6 months (tool value >800 euros/month).