What Seems More Profitable?

SpellZ · May 6, 2011

A) A one time fee of $97
B) $9/month

There is a positive and a negative to both options in my opinion, but I want to hear from you guys... What option would be better?

With this option, you pay, and you get inside a website that has tons of pictures that relate to the content, it has an application (non-mobile, but a web-app) that is REALLY helpful to the target market.

The current product which has direct relation to me is selling for $34.95 as a one time fee, but it is a downloadable software and only for PC, plus they don't offer any extras (reports, 5000 pictures of material related to the product, etc).

Virus1 · May 6, 2011

for me.... i would price at $9 a month...

I could get 1000 people to sign up to something of value for $9 a month
while in the same effort could only get 100 people to sign up for $97 one time fee.
which is about the same money....BUT...
the thing would be that NEXT months... i would do nothing and 80% of them would auto renew.....that is when the benefits comes....

Autumn · May 6, 2011

I'd go for $97 one time. If it's worth it to the target market, they'll pay.

At the same conversion ratio, you'd have to get 10-11 months of rebills out of the customer to get the same revenue from $9 a month, and I doubt it would convert 10x better than the $97 option. Playing around with a higher monthly fee could be an option.

SpellZ · May 6, 2011

Yeah, so right now I am sorta stuck in a pickle on what to do?

Go from $9/month to ...... $17/month?
Or just do the $97/month?

No clue... Any other help would be great!

Autumn · May 6, 2011

The only way you're going to find out is to test. There are too many variables for a straight answer: your niche, your product, the competition, the value of the product to your customers, the particular stream of traffic you end up getting, the ability of your processor to run rebills, etc etc.

Try starting off with your one time $97 offer to get a baseline, and then run several thousand clicks for each rebill price point, going from cheap to more expensive.

You will immediately see the effects of price on conversions, and a couple of months down the track you will see the effect on total revenue, once you can determine how long people rebill at each price point.

Conversions rarely have a linear relationship to prices.

Chrisss · May 6, 2011

I personally prefer a one time fee.

But you might get some more money if your monthly fee is reoccurring automatically until people manually unsubscribe. Simply because a lot of people tend to forget to unsubscribe!

Autumn · May 6, 2011

Another thing to consider is that offering people different payment methods can improve conversions.

For example, the original creators of rebilling on the internet was of course porn sites. However, many people have become wary of rebilling offers after getting stung themselves or hearing horror stories about unending shady rebills.

A lot of porn sites now offer fixed one time payment methods (eg. 90 days for $90) with no rebill and a significant number of surfers sign up for these fixed term, one off offers, whereas they might refuse to sign up to a rebilling offer for the same product.

However, it takes time and a lot of traffic to work out which is the most profitable.

MojPoj · May 6, 2011

9 a month, never know how long something will be good for, especially in this realm.

phatzilla · May 6, 2011

I'd definitely go for the 97$, you'd have to have the customer for 10 whole months in order to beat the one-time fee. Do you see them lasting that long?

Chronos · May 6, 2011

You could always do a 50/50.

$50 to get in, 5$ a month after that.

SpellZ · May 6, 2011

Thanks a lot guys!
Wow! I'm getting mixed responses, a 50/50 for A or B, shooot lol....

SpellZ · May 6, 2011

Okay, so after PMs back and forth, the FIRST-FINAL idea (before split testing) is...

$57 OTF + $3/month

What do you guys think about that?

What Seems More Profitable?

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