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Pricing Strategy: Pricing strategy question: How do you determine whether to offer subscription pricing, transaction pricing or both?
JM
JM
Jon Manning, Pricing Strategist / Author / Mentor answered:

As someone who has worked in pricing for almost 30 years, I know that one of the biggest myths of pricing is that you should only offer one pricing model. Offer two - both subscription & transactional. Customers will self-select &/or the market will segment, and you will quickly find out what is their preferred pricing model.
As an aside, another pricing myth is that you can low-ball your pricing and raise prices later. Its successful in ~10% of attempts.
By default, the choice of pricing models also states the obvious. Its not about what you want. Its about what the customer wants.
And yes, you should have three choices. One choice gives you a 50:50 chance of closing the sale. Two choices forces the customer to make a price-based decision. Three choices, and the customer says "which one do I buy?" not "do I buy from this outfit?" and secondly they are forced to make a value-based decision.
Also think about creating a decoy product, and on the pricing page on your website, lay the packages out dearest on the left, cheapest on the right.
Happy to chat further about any of the above...or more!

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