Subscription Paid Yearly Vs.Paid Monthly

Discussion in 'General Business' started by MaverickW, Jan 29, 2008.

  1. #1
    Hi,

    I've noticed this in many cases: Subscription based services cost more annually if you choose to pay monthly than when you choose to pay annually.

    Awerber for example, costs $179 when paid annually vs. $19.95 paid monthly.

    That's $60 less when you pay yearly. Does the logic "loosing money on the long term" apply? Why is this done?

    What is the business logic behind providing such a payment plan?
     
    MaverickW, Jan 29, 2008 IP
  2. Barefootsies

    Barefootsies Well-Known Member

    Messages:
    2,997
    Likes Received:
    57
    Best Answers:
    0
    Trophy Points:
    165
    #2
    Two fold.

    I would prefer to get a year's worth, or 6 month's worth in one large chunk. So I might offer you a discount (or "value") to do this.

    However, if you want to pay month to month. That's fine. You offer your standard plan. In this case $19.95.

    For me on membership sites, since a lot of people are worried about being rebilling, and can't cancel, etc. I charge more for that plan. So in your example, I would charge say, $21.95 non-recurring.

    Yes. Plenty of people pay it. Even people who sign up every, or every other, month.
     
    Barefootsies, Jan 29, 2008 IP