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Ask HN: My startup has more annual subscribers than monthly. What to make of it?

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Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#101

Post by nextaccountic »

throwaway_23124 wrote: post #74
ajaimk wrote: post #10

2 months off for paying annual pricing is a very good deal for someone who plans to use you product on the long term. I personally have a few items I pay for annually because I don't see myself stopping from using it AND there is no obvious replacement. I would NOT recommend changing the 2 months off; you'll annoy your most loyal customers.

I absolutely don't plan to change any existing subscription; everybody always gets grandfathered in forever. The early adopters' invaluable feedback + potential bad rep from raising prices is reason enough. I'm mostly looking for advice on how to price things for my future customers :) >2 months off for paying annual pricing is a very good deal for someone who plans to use you product on the long term. I too pay for…

> how do I monetize this stickiness to extract maximum value from future customers?

Don't. Focus on acquiring more customers instead.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#102

Post by B1FF_PSUVM »

aasasd wrote: post #70
carstenhag wrote: post #62

Earlier quoted context omitted.

Also, but not only. Yearly subscriptions in itself guarantee that the user commits to 12 months and can't cancel during those 12 months

> can't cancel That's how you get angry posts on social media. See: Adobe.

I think the angriness was from Adobe refusing to cancel now effective at the end of the contracted year - i.e. making a simple "does not renew" note - more than 30 days before end of contract, or somesuch. Therefore catching forgetful customers paying for a second unwanted year. "Understandable", as they say.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#103

Post by bArray »

Something I haven't seen in the comments is simply that some businesses operate on an annual budget allocation, usually older, larger companies.

One thing I would suggest about pricing is not to get greedy - nobody likes to be charged more simply because they can be. If you're going to increase pricing, I believe the perceived value should also increase.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#105

Post by astrocat »

orasis wrote: post #100
dumbfoundded wrote: post #12

If it's not broken don't fix it. I would focus on the top of your funnel to increase sales. Also, you want to have more annual subscribers than monthly. It's almost certainly more profitable. You're essentially giving up 1/6 of revenue in exchange for guaranteed 0% monthly churn. A simple estimate of what your breakeven monthly retention is: 98.5% = (5/6)^(1/12). So if you're losing less than 1.5% of your customers m…

I sooo disagree. Mispricing could be leaving massive value on the table plus increased margin can allow you to pay more for user acquisition.

Your approach sounds like the mindset of chasing growth instead of sustainability. Short term gains over long term value.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#106

Post by radley »

atat7024 wrote: post #60
DamnYuppie wrote: post #48

Earlier quoted context omitted.

He can keep that pricing tier/billing plan for existing customers and create a less generous one for new customers. I would keep reducing the discount until sales fall way off.

What metric confirms that correlation?

It's basic pricing strategy:

Kevin Hale - Startup Pricing 101

https://youtu.be/jwXlo9gy_k4?t=578

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#107

Post by gnicholas »

> Does this mean I should simply increase prices? Is it fair to interpret this as the majority of the market saying "I'm happy to pay the highest tier your product offers"?

Not necessarily. It indicates that people don't view your service as transactional, and that people like to feel like they're getting a deal.

If you want to experiment with higher pricing, you might try gating some of your features establishing a premium tier. I have done this with my browser plugin, which is $22/yr if you just use one browser, but if you want to use multiple browsers it's $40/yr. That has allowed us to price discriminate between lower-intensity users and higher-intensity users. We also donate 5 licenses to students in low-income schools for each purchase at the higher tier.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#108

Post by stonesweep »

throwaway_23124 wrote: post #77
throwawayboise wrote: post #59

If it's B2B, it's easier for business customers to get a once-a-year expense paid than to get authorization for a monthly charge to a corporate card. Many organizations don't like having their corporate card numbers enrolled in open-ended recurring charge plans.

I see. My product is somewhat in between B2B and B2C (i.e. plenty of regular folks subscribing for their personal use, but also plenty of companies using it). Perhaps this is a strong signal in favor of price segmentation to make future B2B customers more than personal users?

B2C random internet user here, it's more complex than that for me and not always about price. I'd say the thoughts go something like this:

- is this a product that involves a lot of personal time to get started with and migrate away from? (example: cloud hosting for files and photos)? With this type of product, I'm going to spend more time on the initial 30 day evaluation, and if it suits my needs then I go right for the (multi)year contract. The personal investment is large (get all those photos uploaded, e.g.) so my chances of leaving after a few months are statistically unlikely.

- is this a product that I can walk away from with no real loss? (music streaming service) well this a service which quality can vary month over month, I'm more likely to use monthly pricing just so I can cancel at any time if I don't like it. I have no real investment to your brand, yeah it's nice but there's 100 others out there I can move too easily.

Usually with a multi-year discount, I'll buy the first year just to be sure and if I still like it after the first year, I'll buy multiple years. Just so I never have to worry about randomly missing a payment or somehow "losing" it (my login, my access, my files, etc.) but balance that against "how long will this company be around, really?" - it's a sense of security over time because I've invested a lot of personal time into the product. Walking away is not in my plans at the time.

Third reason that doesn't fit for you but is also a thought: is this a donation to (open source project)? Will I give them more money - less recurring middle-man processing fees - by paying one lump yearly sum instead of donating monthly? I use Liberapay for some FOSS donations and they tell you to do this straightaway, one lump sum is better for the receiver than monthlies.

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#109

Post by jimkleiber »

ipaddr wrote: post #92
throwaway_23124 wrote: post #74

Earlier quoted context omitted.

I absolutely don't plan to change any existing subscription; everybody always gets grandfathered in forever. The early adopters' invaluable feedback + potential bad rep from raising prices is reason enough. I'm mostly looking for advice on how to price things for my future customers :) >2 months off for paying annual pricing is a very good deal for someone who plans to use you product on the long term. I too pay for…

If your product is priced well putting a year down makes sense. I only want to worry about you once a year.

I've often thought about giving a one month option and a three month option (quarterly) and yet I haven't really seen this in SaaS... do you think there might be some people who would prefer to only worry about it once every three months?

Re: Ask HN: My startup has more annual subscribers than monthly. What to make of it?

#110

Post by ska »

throwaway_23124 wrote: post #77
throwawayboise wrote: post #59

If it's B2B, it's easier for business customers to get a once-a-year expense paid than to get authorization for a monthly charge to a corporate card. Many organizations don't like having their corporate card numbers enrolled in open-ended recurring charge plans.

I see. My product is somewhat in between B2B and B2C (i.e. plenty of regular folks subscribing for their personal use, but also plenty of companies using it). Perhaps this is a strong signal in favor of price segmentation to make future B2B customers more than personal users?

> Perhaps this is a strong signal in favor of price segmentation to make future B2B customers more than personal users?

Only if you can differentiate value meaningfully also. And I don't think it's a strong signal of anything.

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