What are the pros and cons of Program Fee vs. Subscription?
Is there an ideal customer type of each model, or does it all depend on your go-to-market strategy?
There are merits to both options, but unless your economics dictate one over the other, the choice should be made by your consumers.
I would suggest that you use landing pages to test both pricing models and let the relative click-through-rates tell you which is the right way to go.
Validate the consumer preferred model before you commit to it. You may discover one as a clear winner overall, or that one wins out in a key market segment. You may also find that the distribution is fairly even. Keep in mind that it is possible to utilize both - think Amazon selling audio books, but also offering Audible Subscriptions.
Ultimately, you'll want to make sure that the economics work for you - and focus on maximizing customer LTV (life time value - ie the total you'll earn per customer over the lifetime of that customer).
I'm happy to explain the process of testing these (even before the product exists) in detail. Just shoot me a message.
Hello,
Both are good, but, in light of the term used 'personalized' I would have to lean more towards Program fees.
For me the reason is simple, if I as a user want to go in for a 'personalized' solution I would like to feel that a special interest is being taken in me, which I doubt I'll feel with a Subscription service.
For the second question, both the points have to be factored in. You have to take into consideration your user base as well as your business model.
In this case I would have to say high earning professionals would be ideal candidate for 'personalized' online training. If it aligns with your go to market strategy that will be perfect.
It actually depends on how often you will have your students come back to the site or how often you update info. If students watch the content on site for a short period of time lets say two weeks then a program fee should do. If education happens to be ongoing then a subscription fee should do the trick. I should know I have an educational site with 700,000 registered students :) my answer is based on "statistical" experience
In regard to targeting business professionals there are platforms you can look at to see how they operate. Most recent one that comes to mind is Lynda.com that was acquired and integrated into LinkedIn. Currently, LinkedIn has a subscription model that starts off free for a month.
For a personalized online learning platform, I am assuming you might be providing customized learning modules that are specific to the business user's profile. Given that, a subscription model would serve best for continued access and engagement with your platform. These are business professionals that value continued access to content from the platform for their ongoing learning & development.
At the same time, for specific programs that are time bound a program based fee can also make sense. Here you target business professionals that are interested in a specific learning module/program.
The pricing can vary based on the user type/learning module. I currently advise a few startups in the ed tech space and we have explored very interesting opportunities that are being monetized. I would be happy to speak further on this topic and learn about your unique platform offering and share specific guidance.
Off all the comments below, I like Ryan's the best. I assume the reference to "personalized" is a reference to the platform and possibly the content. Personalised pricing (aka marketing nirvana) is nearly with us (the airlines are closest) but there is still a way to come.
I like Ryan's comments below because there is no rules that says you should only have one pricing model. Let customers self-select / self-segment. Those who want program fee will buy it and those that want subscription will buy it. One model may service as a decoy to another and v.v..
With the subscription model, create three versions (think good / better / best) and price on a log pricing curve (not linear), unless you're making one of those three options a decoy.
The advantages of three options: customers say which one do I buy? (not do I buy?) and you force them to make a value-based, rather than a price-based, decision.
Happy to chat further!
Hi
I think depends heavily on the targeted group.
At some point we will see the rise of big platforms with standardized trainings for specialists and middle management. Here, it should gravitate to subscription model but different price plans and paid per worker within the program. The very simple reason is that with standardized products you would end up competing on price and the subscription model gives high benefits to HR Manager (predictable costs, no problems with meeting new demands not budgeted earlier) and for provider (lock-in for longer period and predictable cash flow).
The other group of solutions courses will be customized made specific to the needs of a specific group. When you look at the structure of the company actually those trainings make the biggest chunk of the training market. In this category you would have: welcome trainings, product trainings, internal procedure trainings, update trainings etc. Here it is more difficult to predict how it will be developing. Companies can be charged per training made or some sort of prepaid number of hour trainings. For sure this is where the innovation has to still happen and whoever is providing a more resilient, scalable solution will have higher chances of dominating the whole market
Btw I would not be surprised it companies start paying for exclusivity – to make sure that given trainings is not available to at least immediate competitors.
Best
Asen
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