Hi guys, this is Rob Levin and welcome to the latest episode of 99 marketing problems. I’m a growth marketing consultant specializing in marketing and growth strategy for SaaS and subscription companies, and every week I take a marketing problem and solve it like Vanilla Ice.
A marketing director from a mid-sized subscription company hit me up last week with another common marketing problem: she felt that their annual vs. monthly pricing optimization just wasn’t working. They were only getting about 15% of customers to choose annual plans, even with a 20% and sometimes 40% discount.
Listen, I’ve seen this movie before at multiple subscription companies. Here’s what I told her:
First, you’re probably doing what most companies do – hiding your annual pricing option in a dropdown menu or making people do math to figure out the savings. Stop doing that. The first rule of conversion optimization is don’t make people think so much.
Make it obvious. When we did this at WWE Network and Nickelodeon, we saw a double digit jump in annual plan selection just by showing the math right there on the pricing page.
Second, that 20% discount? That’s basic, or “mid” as the cool kids say. The real magic happens when you combine a discount with exclusive benefits. At one subscription client, we added special “annual member” content and early access to new features, and we made those exclusive benefits extremely obvious and easy to understand at the outset. We saw a 19% lift in annual plan take rate with that one.
Here’s the thing – don’t just think about the discount. Think about the value prop. Your annual subscribers are your best customers. Treat them that way.
That’s it for this week’s 99 Marketing Problems. What did you think of this one?
If you have a marketing problem you’re looking to solve, leave a comment and I’ll tackle it in a future post. Catch you next time!
SubscriptionGrowth #MarketingStrategy #SaaS #PricingStrategy
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