People get excited about big price discounts.

Hi guys,

Ryan here from Sumo Jerky. I have some pretty compelling anecdotal evidence that might influence how you price your subscriptions. 

Learning: People get excited about big price discounts. 

I actually got this idea from listening to my wife talk about clothing purchases (ie "ryan, this dress cost $150 but it was 40% off! OMG!!")

So...

1 - I recently took pricing up across all tiers, but took pricing up SUBSTANTIALLY for 1 month memberships and then added substantial discounts for the longer term subscriptions. My goal was to incentivize more long term subscriptions and steer customers away from month-to-month memberships which add a lot volatility to the business.

So for example (the numbers below are very ROUGHLY approximated for speed):

Old pricing

1 mo - $20

3 mo - $57 (5% discount)

6 mo -  $108 (10% discount)

12 mo - $210 (15% discount)

New pricing

1 mo - $30

3 mo - $70 (25% discount vs $90) displayed as       "$23/mo   25% Off"

6 mo - $120 (33% discount vs  $180) displayed as   "$20/mo   33% Off"

1 year - $220 (40% discount vs $360)  displayed as "$18/mo   40% Off"

2 - I displayed ONLY the monthly price on the offer page and then the full price on the checkout page. 

3 - I displayed the depth of discount on the offer page.

4 -  I listed the long term memberships first starting w/ 1 year, then 6 month, then 3 month, then 1 month at the bottom of a drop down menu (you can see it here at http://www.sumojerky.com/get-started

Result:

We had approximately 5 long term subscriptions in the first 8 months of Sumo Jerky and we've had approximately 10 in the 1 month since I've made this change. 

Sumo Jerky hasn't even been around for a full year, but now with more 12-month subscriptions coming in, I can be more confident that the business will sustain another year and have less volatility in my orders for suppliers. 

Hope this helps.

-ryan

Hi Stevi,

This was a strategy I implemented in the beginning of one of my subscription boxes, Escape Monthly. We have an artificially high retail price of $49.95, but literally offer everyone a 20% off for life discount. We tested everything in between as well, 30% off, 40% off, and found that conversions don't get much better until you go all the way up to 50% off. The 20% off seems to solve that ever increasing psychological need to not purchase anything these days without some sort of discount! Other benefits to having a high retail price include being able to do deeper discounts on deal sites.

Thanks for the suggestions @jamesonlmorris and @ryan_luedecke 

I have been running my box for about 3-4 months and things are going really well but I'm running into 2 main problems

1. I'm not making enough profit in each box
2. It's mostly 1 month subscriptions with a few 3 month subscriptions. 

I've got about 40 subscribers, should I wait until I have more to see if I can get better margins from suppliers? (I'm very hesitant to sacrifice quality) - I run a clothing subscription box tailored to people's preferences

Should I raise my price as mentioned above? Do I need to notify anyone?