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Pricing Strategy: Pricing strategy question: How do you determine whether to offer subscription pricing, transaction pricing or both?
JP
JP
Joseph Peterson, Names, Domains, Sentences and Strategies answered:

If you anticipate customers returning regularly to query the database for fresh information, then subscription pricing may be your best bet.

As a single transaction, the cost to the customer would need to be 12 times as high just to equal the revenue from a 1-year subscription. Since $600 up front is more intimidating than $50 per month, this will deter signups. Customers are more reluctant to try out a service with a high price tag.

Meanwhile, if paying $50 allows them to experiment with your database, they'll be more likely to begin. And to continue.

Using a subscription model has other advantages. You can retain greater control over your database by dishing it out only incrementally to subscribers, query by query.

Also, you'll gain a lot of useful intelligence on how customers use that database if you steer them to an in-house portal. I'm not talking about individual customer profiling. You can respect user privacy but simultaneously learn what customers want, expect, or need from your database / interface. That allows you to improve their experience.

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