Subscription vs per-product pricing.

[galleryseek]

I'm sort of struggling with a decision based on pricing.

A partner and I are getting away from Udemy.com soon (which is a marketplace for instructors who create educational courses) and building our own site to hold our courses under our own brand.

We both have a decently large following from youtube + an email list, and while initially we were set on per-course pricing (a one time fee per course), I'm thinking subscription billing is worth considering.

Offer the paid courses (doing free as well) at a flat per-course fee, vs. offering a subscription where members pay $12 or so a month to access all courses.

I think a short-sighed concern is we won't make as much money initially under a subscription, as people are only paying $12 to access *everything*, but I would imagine with such a deal, this will inevitably lead to a higher conversion ratio and over time, if there's enough frequent content added and it's high quality, a high retention will make us a lot more money than flat pricing.

Anyhow, this might be my first business-related post here in 8 years. Thoughts?

Cheers!

[plaster]

Do both. Small monthly fee that recurs and offer dicounted price on courses for members. $12/month is a couple candy bars.

[Sly]

Do you have enough content to keep the average member rebilling long enough that it would match or beat your revenue if you sold as a flat fee?

Will either billing model sell at a conversion rate high enough to match or beat the other?

You need to test this. It's the only way. Everything else is just guessing. This is going to be a lot of work, but it will pay off if you do the test right. Create 2 services to use as your testing ground. One is flat, one is subscription. See which one has the best conversion rate.

If your subscription service has the better conversion rate, do the math and estimate how many months you need to keep a member in order to make the exact same amount of money that you would have made if they bought flat.

If the flat service has the better conversion rate, do the math and estimate if the one time flat fee plus additional sales (you better be upselling) will make you more or less money then the subscription service.

This is all math and testing. If you care about this, don't leave it up to guessing and recommendations from others because those others have not done the testing. Do the math. Do the tests.

[galleryseek]

Originally Posted by Sly

Do you have enough content to keep the average member rebilling long enough that it would match or beat your revenue if you sold as a flat fee?

Will either billing model sell at a conversion rate high enough to match or beat the other?

You need to test this. It's the only way. Everything else is just guessing. This is going to be a lot of work, but it will pay off if you do the test right. Create 2 services to use as your testing ground. One is flat, one is subscription. See which one has the best conversion rate.

If your subscription service has the better conversion rate, do the math and estimate how many months you need to keep a member in order to make the exact same amount of money that you would have made if they bought flat.

If the flat service has the better conversion rate, do the math and estimate if the one time flat fee plus additional sales (you better be upselling) will make you more or less money then the subscription service.

This is all math and testing. If you care about this, don't leave it up to guessing and recommendations from others because those others have not done the testing. Do the math. Do the tests.

Ty for the reply. How exactly would I go about split testing 2 entirely separate services? Our traffic comes primarily from youtube and whenever we email the lists. I'm thinking it might be a bit tricky to separate that traffic, unless we just split the email lists in half and send one list to one service, and the other list to the other.

Then if we choose a winner, how do we avoid confusing the audience that went to the loser? Just redirect them to the winning service, or throw up a LP stating we're switching to a new location? Then what about those people who purchased courses, but now have to buy a subscription (or vice-versa) to access the same courses?

Like you said, sounds like a ton of work and a lot of headaches. I wish there were another way to test this, perhaps throwing up a survey?

[Sly]

Originally Posted by galleryseek

Like you said, sounds like a ton of work and a lot of headaches. I wish there were another way to test this, perhaps throwing up a survey?

Anything great takes a shit ton of work. It sounds like you have something good going on. Put in the work and turn good to great.

Surveys are not that great. Humans are not good at predicting what they will or will not do. It's all based on feelings and not actual actions. You need to test.

As Steve Jobs said: customers don't know what they want until we've shown them