SubscriptionMay 26, 2022

How to Prepare Subscription Pricing Strategy for Your Customers

Do you know that on average, subscription-based businesses spend just 10 hours a year deciding on their subscription prices?

When you have a subscription business, defining your pricing plan might be tricky. Numerous subscription businesses face this challenge of deciding how much they should charge? Or, what’s the optimal price plan for subscription billing management?

The applicable model can actually make a huge difference between gaining and losing subscribers. Setting up the right subscription pricing strategy allows you to plan out how you will bill your guests.

What’s Subscription Pricing Strategy?

Subscription pricing strategy helps you figure out how many of your subscribers will pay what amount when they subscribe to your service. Subscription pricing differs from standard product pricing as the price is generally determined by the duration of subscription, with longer subscriptions being the most cost-effective. Apart from this, there are certain other factors such as the subscription billing platform, target customers, market competitors, and so on.

Many organisations fail to plan an ideal pricing strategy for their customers which sometimes impact their overall growth. Some of the reasons include lack of market research, customer preferences and analysis, etc.

However, when it comes to pricing and subscription based billing, it’s recommended to revise it every 9-10 months or further constantly, especially if you are a start-up.

How to Find the Right Price and Value?

To gain proper pricing, you must explore and talk to your target audience. You can’t just ask your buyer, “How much would you like to pay for this?”

Rather, over time, a range of study approaches have been created and applied which reveals the four most popular strategies.

  • Gabor-Granger Strategy
  • Van Westendorp Price Sensitivity Meter
  • Brand Price Trade-off
  • Conjoint Analysis and Discrete Choice Analysis
  1. Gabor-Granger Strategy

The Gabor-Granger Strategy is a statistical approach that involves asking the consumers how likely they’re to buy a product at a certain price.

To put it in another way, the strategy entails a sequence of questions similar as “Would you buy a product at the given price?” Based on the response, the price increases or decreases. The sequence reprises couple of further times until the client refuses to go high or low.

  1. Van Westendorp Price Sensitivity Meter

In this strategy, the target customers are asked several questions such as

  • When do you think the pricing of a product or service is so low that the quality can’t possibly be good?
  • At what price do you suppose this product or service is a good deal?
  • At what point do you believe this product or service becomes too expensive to purchase?
  • At what point would you find the brand to be prohibitively precious?
  1. Trade-off between Brand and Price

The Brand Price Trade-off system is a system to determine your relative “brand worth” or “product attributes”. This is a competition-based pricing approach as it answers how frequently your request is prepared to pay in comparison to analogous particulars from other rivals.

  1. Discrete Choice and Conjoint Analysis

Conjoint analysis is the approach used in request analysis to discover how customers value distinct product or service features.

Discrete choice analysis is similar to conjoint analysis. However, the difference is that respondents in conjoint analysis evaluate product configurations independently of one another, but the respondents in discrete choice analysis assess all alternatives at once.

The primary purpose of both is to provide a measure of the relative applicability of each technique as well as how they influence each other.


Pricing strategy is a delicate task in subscription billing management. Thus, investing time and effort into perfecting it is surely worth it.

Whether determining the consumer’s perceived value is straightforward or complicated, pricing strategy conduct must be supported by data. It’s pivotal to suppose about your intended and possible profit periphery. But conceivably indeed more importantly, you will need to know your customer acquisition cost, churn rate, and repeat purchases.