Notes

Picking THE PURCHASE PRICE That Maximises Profit
Choosing the right subscription price will determine how profitable your site is.

Obtain the price too low as well as your costs.....marketing in particular.......will eat into your margin. You could also put people off if the price point provides perception of low value.

Get the price too high......particularly in comparison to alternative resources of information.... and you will put prospects off.

Before giving you some guidelines it is very important to remember:

There is nothing to avoid you from changing the price to test the market.

Many subscription site owners pluck a subscription fee out of the air when they launch their site. Often it's predicated on only a hunch. They never test whether it is too high or too low to increase their profit. It is difficult to change the purchase price for a print publication, but not for an online website.

Test! Test! Test!

There are no hard and fast rules about how exactly much you should charge for usage of your website, but here are 20 ideas to help you work out the perfect price for your subscription:

The monthly subscription could be anything from �1/$2 up to �1,000/ $1,800. The most frequent subscription charges fall in the number �4.99/$4.95 - �19.99/$19.95.
An internet site with just 1,000 members charging $9.99 a month will create about $120,000. If read more is run from home, even after costs it might generate a net income of over $100,000 for the individual publisher.
It is strongly recommended that publishers provide a selection of payment plans with discounts for members ready to commit for longer periods of time, for example:
9.97 /month, or
24.97 /quarter, or
87.00 /year
In the event that you offer three pricing points, you tend to get most subscribers choosing the middle one. It is a psychological thing
You will probably have seen on charity collection forms a choice of three donations. They do that because they know that most people will choose the middle one, that is usually set at a rate higher than people would normally give:
"Please tick the donation you intend to make:
5.00
25.00
50.00
Other"
If you provide a monthly price point, make sure that it is much higher than 1/12th of the annual. get more info intend to encourage people to subscribe for for as long a period as you possibly can, whilst not postponing people who want to test the water before fully committing themselves. E.g. Monthly 19.97, Annual 149
Offering just an annual subscription will help reduce your conversion rate as you are increasing the perceived risk for prospects signing up. This is still the case even if you offer a 100% money-back guarantee
Be aware that many payment providers won't enable you to charge an annual subscription because if the website closes down they're responsible for refunding members the outstanding balance for the remainder of the 12 months. Consult with your payment provider before signing up. Also make sure that they are able to take automatic monthly payments if you are supplying a monthly subscription. That is called 'Recurring Payments'
Generally speaking, sites aimed at consumers charge less than those targeted at businesses Consumer sites typically 30-120 per year Business sites typically 120 - 700 each year
What are the competitive sources of information for the potential audience? Just how much do they charge? If Manchester United charges �100 per year for membership of the state fan club, a competing online independent fan club should probably charge no more.
The more exclusive this content, the more you can charge. An extremely successful share trader, Vince Stanzione, charges �100 /$180 a month for a newsletter reporting what trades he could be about to make or has just made. Jay Abraham charges $300 per month for usage of his website that gives his personal advice on growing a business (www.abrahaminsider.com)
Study magazines in your sector. How much do they charge? What is their circulation? How do you want to compete? There is no rule about charging much more or significantly less than them, but you have to be sure your value proposition is more compelling when attempting to attract new members. Remember being an online site you offer huge advantages over print. These benefits have a value you can charge for.
People love a deal! Set your price a little higher than you intend to charge and discount it back. It has two benefits:
People perceive the value of the content reaches the higher price
Prospects feel they are getting a bargain
There are psychological barriers in pricing. It is better to charge $4.95 per month than $5.00, or $9.97 is preferable to $10. Additionally, there are opportunities to push pricing up towards these barriers. For instance if you charge $385 per year, you can probably getaway with lifting the price to $397 without the impact on subscribe rates. Just don't break the $400 level as this is the next psychological barrier and will result in a fall in subscriptions.
Don't give discounts to loyal members! In Investing In Lombok, Indonesia returns year after year they perceive that the price they pay is add up to the worthiness they receive. By all means reward their loyalty with bonus information, like a free ebook or perhaps a research report, but don't decrease the price. This is the very common mistake.
Offer promotional prices for twelve months, but don't drop the general price. If you were to think that you are missing out on a big market group because they are more price sensitive, offer them a promotional code/discount on the standard price. Don't drop the price for all subscribers. An example is in the event that you decide you want to attract students who are generally very price sensitive.
DON'T ever consider, even for an instant, charging a one-time fee for lifetime's access. This was common in the early years of the web, but I haven't seen an individual site that has survived with this particular strategy
Test, ensure that you test again! One of the biggest benefits of the web is you can easily change pricing, make discounts available or promote free incentives with minimum effort and cost. For instance distribute two different price offers to two similar groups of prospects. Measure the response rate and margin to find out that offer is most profitable. Then develop a new offer and check it out contrary to the best of the initial offer...... etc. This is known as "AB Testing"
You can also consider offering trials, but make sure you get the customers charge card details prior to the trial starts and obtain them to agree that after the trial is over you'll automatically bill them unless you receive written instruction never to.
I hope that you discover this advice useful. It's been put together from the knowledge of helping a large number of online publishers decide on the subscription fees because of their membership websites. Please take the time to research and choose the right price. It is just about the most important decisions you'll make in determining how successful your business will be.

Miles Galliford may be the co-founder in SubHub - www.subhub.com . The business is a world leader in assisting individuals, small publishers and organisations to set up paid memberhip websites. For large amount of FREE information and resources visit www.subhub.com .
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