Pricing Discounts per term
Hey everyone, I’m currently working on getslice.co and I’ve found 56% of subscribers are opting for a 3 month term on initial sign up.
That’s great! But should I be lowering my discount as that’s a large percentage of users?
Right now I’m at...
- $9.99 per month
- 5.96 per month for 3 months (41% off)
What’s a normal way to structure term discounts? Should I even act on this?
Personally, I think 41% is pretty aggressive for such a short term commitment. You can usually get away with doing annual discounts at only 15-25%.
Is there any reason as to why you're not offering longer terms? It would allow you to have an increasing discount based on the level of commitment from the customer.
You could very well ask your customers why they chose that plan to find out if they went for the longer term simply because of the discount or not, and go from there.
I would agree for most products, but the churn on food based subscriptions is notoriously high (most people don't actually stick around)
It might be too early to tell, but i'd look into your churn rate and take that into consideration.
Maybe a large discount for the first 3 month period, then a smaller on from then on?
ah, that's totally fair, didn't think about how damn aggressive some of the service's my wife's used are. that said, they tend to be an upfront discount, not an on going on. @ksamera does your service automatically renew every 3 months at the discounted rate?
Originally I made the 3 month with a “free month” so that’s why it’s so aggressive. After testing it’s clear that people appreciate the discount. Could definitely look into offering longer terms as well. 15-25% sounds like a good starting point for a 3 month discount.