Site owners: What price point per month will result in LESS chargebacks/cancellations

[$5 submissions]

From your experience, what monthly subscription rate would result in less people charging back or cancelling? From what I've read here a few years back (maybe 2005?) the magic number is $8. Has this changed? Is this even correct?

Now, assume the recurring membership product is a MAINSTREAM informational product. Would $8 be too little or too high?

Thanks in advance

/archive at http://twitter.com/#!/askmr5dollar

[dropped9]

To determine if 8 is too little or high one would need to factor in cost of acquiring the content.

Roughly on average how much will that be per month?

[$5 submissions]

Originally Posted by dropped9

To determine if 8 is too little or high one would need to factor in cost of acquiring the content.

Roughly on average how much will that be per month?

My content is 3 cents a word. Let's assume that the monthly specialized content load is 10K words. That's just $300. Divided by $8 So around 38 members to break even on the content side. There's also the sunk cost of:

# sales page
# SEO on page /backlinks
# article marketing (direct sales not link farming)
# social media shares

etc etc

[sologirlcontent]

magic number $0.00

tubes

[georgeyw]

Originally Posted by sologirlcontent

magic number $0.00

tubes

Sometimes that is too much.

[mynameisjim]

I read somewhere that direct marketers have tested a lot of prices and they found that $20 is the threshold for people caring. If it's $20 or less, most people don't care. Above that, people start to care. That's why so many things are $19.95. It's the max you can charge and people have zero problem risking that amount of money.

[$5 submissions]

Originally Posted by sologirlcontent

magic number $0.00

tubes

[$5 submissions]

Originally Posted by mynameisjim

I read somewhere that direct marketers have tested a lot of prices and they found that $20 is the threshold for people caring. If it's $20 or less, most people don't care. Above that, people start to care. That's why so many things are $19.95. It's the max you can charge and people have zero problem risking that amount of money.

Thanks, Jim

[Agent 488]

Originally Posted by mynameisjim

I read somewhere that direct marketers have tested a lot of prices and they found that $20 is the threshold for people caring. If it's $20 or less, most people don't care. Above that, people start to care. That's why so many things are $19.95. It's the max you can charge and people have zero problem risking that amount of money.

read the exact opposite. of course i have zero practical experience with it.

[TheDoc]

It has to do with what is sold to them / what they get - over the price.

If the product can't sell at $20, then it wont retain at $20, if it sells at $8, 10, or 15 or $1000's monthly, then it will retain at those rates.

Don't worry about returns... 2% or whatever return, is nothing over a $5 gain in price on a recurring product. Find the highest price point the product will convert at, it could be double, triple or much higher - don't let others tell you what it should be, find out for yourself.

[$5 submissions]

Originally Posted by TheDoc

It has to do with what is sold to them / what they get - over the price.

If the product can't sell at $20, then it wont retain at $20, if it sells at $8, 10, or 15 or $1000's monthly, then it will retain at those rates.

Don't worry about returns... 2% or whatever return, is nothing over a $5 gain in price on a recurring product.

Do you think a recurring product that has a SETUP fee then lower monthly fee would encounter more heat than a straight low monthly fee?

Example: $10 first month fee includes set up and $3 monthly after that

Numbers vary but the factor to focus on is the initial setup amount will be higher than the monthly recurring

Will that work?

[TheDoc]

I sell several products I think are GREATLY over priced, personally I wouldn't pay more than $10 for them, for my own freaking product...but I sell them, alllllllll day at $120. If I listened to myself, I would have lost a ton of money, but I listened to the market, and they were willing to pay much more.

[TheDoc]

Originally Posted by $5 submissions

Do you think a recurring product that has a SETUP fee then lower monthly fee would encounter more heat than a straight low monthly fee?

Example: $10 first month fee includes set up and $3 monthly after that

Numbers vary but the factor to focus on is the initial setup amount will be higher than the monthly recurring

Will that work?

If the bulk of the content is up front, and only a small amount monthly, that's fair... and people like fair billing.

[alias]

Gouge vs value would really depend on the desires of the product owner and how it is marketed.

Both work. Many people say to get more per sale like doc, but then u have others like pimproll doing 10.00 monthly to better target the customers purchasing on perceived value.

This is why some programs have multiple price points for the same product, the best point depending upon how you are marketing it.

[TheDoc]

Originally Posted by alias

Gouge vs value would really depend on the desires of the product owner and how it is marketed.

Both work. Many people say to get more per sale like doc, but then u have others like pimproll doing 10.00 monthly to better target the customers purchasing on perceived value.

This is why some programs have multiple price points for the same product, the best point depending upon how you are marketing it.

It's been many moons for me on this...

I once did the math on $10-$30 memberships with recurring. If I remember correctly, $10 vs $30. For every 10 sales it's like a $150 difference, meaning the $30 site could convert 1:1000 and the $10 site had to convert 1:250 to compete. So those $10 sites REALLY need to kick butt!

But it is true, it's all how you market it and what's being sold. If it doesn't have the value, you can't fake the retention.

[$5 submissions]

Originally Posted by alias

Gouge vs value would really depend on the desires of the product owner and how it is marketed.

Both work. Many people say to get more per sale like doc, but then u have others like pimproll doing 10.00 monthly to better target the customers purchasing on perceived value.

This is why some programs have multiple price points for the same product, the best point depending upon how you are marketing it.

I think you are right on the money. What do you think of this scenario comparison?

Example: if you market something to a bunch of people who are very FAMILIAR with that item/service, you would quickly find yourself DEFENDING your rate (unless it already matches the prices of services/products already being marketed to that group)

However, if you market it to an UNFAMILIAR group, it can go either way--you can be ignored more or less OR people will be less likely to challenge your rate

[iSpyCams]

I have heard that 24.95 is the threshold currently with inflation. My own tests are showing that 19.95 is better though. the extra rebill or two more than make up for the lost $5 on the initial.