To determine your pricing strategy is one of the most difficult, yet important issues to decide for an entrepreneur.  The horizon of subscription economy is vast, and to position your strategy in a competitive market is the primary factor, which needs to be considered. The important premise for the rise of subscription economy is the price advantage to customers combined with the flexibility to pick the choice of the service that best suits them.

Pricing Models

Let us review a few factors while designing a pricing model.

Avoid One-size-fits-all pricing strategy

One-size-fits-all pricing strategy is not suitable to all subscription businesses.  Pricing models can be customized and designed to suit the target customers for different business needs.
Few variants of pricing structure are discussed in the following list:

  1. Pricing based on recurring frequency. (Example: Daily, Monthly, Annual pricing)
  2. Usage based charges calculated on the actual usage.
  3. Pay as you go subscription billing model like prepaid and postpaid.
  4. Variant pricing: Pricing based on the features of service.  (Example: home user and business users are charged differently).
  5. Bundle and Dynamic bundle pricing:  Bundled pricing to offer a set of service vs. individual services priced separately. Customers can also create a dynamic bundle by selecting variant set of service, attributes and features.
  6. Legacy pricing:  Pricing models can be designed differently for new and existing customers. (Example: Different business rules can be applied for new and existing customers at the time of purchase)
  7. Volume based pricing:  Tier pricing or Threshold pricing based on the volume of quantity purchased.
  8. Term based pricing:  Pricing models defined for fixed term. (Example: 12, 24 month contract pricing).

Partner Pricing models

An overhauled and simplified pricing model includes sales channels (Partner networks) for expanding your business.  Trends followed in recent subscription economy are to leverage partner network to reach out to a larger customer base. Establishing Partner Management processes and tools to seamlessly handle tasks like on-boarding new partners, manage existing partners, handling promotions, settlement within the ecosystem helps your business in expanding reach to customers.

Leveraging social media for promotion of your offers

Today, social media channels such as Facebook, Twitter, Google+ are used extensively for b2b and b2c.  Creating awareness about the product using social media or, creating online stores within this network and making it convenient to buy, incentivizing the fans for promoting your product are integrated in one platform to leverage the social media.

Bundled Services

Bundling two or more services together with an attractive price makes the service offering interesting to customer.  Bundle service reduces the hassle of buying each service separately and making the payment process easier for customers.

Dynamic Bundles

A new trend followed in bundling services. Customers are empowered to build their own bundle by choosing the variants of service, attributes and features. For example, they can design a customized bundle with server processor speed, RAM and storage capacity.

Promotions, Discounts, Trials, Freemiums

Promotions in the form of discounts, free trials, coupons and freemium models when combined with pricing models are brilliant ways to attract customers. A capable subscription platform approach is required to offer promotions effectively.

Subscription economy is dynamic

Subscription economy is dynamic and is a solution for volatile global economy. It is time to stop working with traditional methods and stop using excel sheets for managing pricing models:  For those who use spreadsheets for managing pricing – think again!

  1. Pricing strategies needs to be dynamic to scale the business and leverage competitive advantage. Your business cannot be restricted with automated processes and afford a delay to introduce new pricing or launch new pricing strategies.
  2. Often business limit themselves to conventional pricing methodologies just because they cannot handle the operation complexities of innovative pricing models. As a result, the competitive edge and the business potential are lost.
  3. Accuracy in handing pricing models manually:  Customers hate it when they are inaccurately charged for using their services.  This leads to an unhappy customer and also increases customer support costs, churns and ultimately bad publicity.
  4. Operations hassle:  Pricing strategy is linked with the capability of the company in handling efficient operations.  Innovative pricing strategies cannot be successful unless the business has efficient operational automation for managing pricing models efficiently.

Time-to-Market is key

Launching new services on time, having competitive edge over companies offering services, flexibility in changing pricing models based on market conditions, analyzing customer preferences and preparing business for adapting changes in pricing models are very critical functions in acquiring customers in the subscription world.


Creative pricing for Subscription Business and the ability to support the core functions of the business (sales, marketing, operations, IT) is imperative to stay ahead in Subscription Economy.  A fully integrated platform that integrates core components from pricing models to subscription management, rating, billing, payment and collections. It enables businesses to innovatively price products, maximize revenue, acquire and renew customers, reduce costs, and automate operations.
If you would like to discuss pricing strategy for your business, feel free to write to us and share your experience, thoughts and opinions.
- JK Chelladurai, CEO- OneBill.

One Comment
  1. Exactly where is the facebook like button ?

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