{"id":31565,"date":"2022-05-06T05:52:10","date_gmt":"2022-05-06T05:52:10","guid":{"rendered":"https:\/\/www.digitalroute.com\/?p=31565"},"modified":"2024-10-08T12:51:11","modified_gmt":"2024-10-08T12:51:11","slug":"subscription-pricing-models-the-6-most-common-explained","status":"publish","type":"post","link":"https:\/\/www.digitalroute.com\/blog\/subscription-pricing-models-the-6-most-common-explained\/","title":{"rendered":"Subscription Pricing Models: The 6 Most Common Explained"},"content":{"rendered":"\n

Companies everywhere \u2013 from entertainment to healthcare \u2013 are transforming their businesses by launching a subscription business<\/a> with new pricing models. But finding the right subscription model for your business can be tricky. If you opt for flat-rate subscriptions, you may grow subscribers quickly, but your revenue may level off as you offer more services for the same price.<\/p>\n\n\n\n

Many companies are finding rapid revenue growth by combining flat-rate subscriptions with services where customers can simply pay for what they use, like on-demand access to music, movies, software, services, connectivity and beyond (I\u2019ll get into this more below).<\/p>\n\n\n\n

There\u2019s a multitude of flexible pricing models to consider, from simple subscriptions to more complex shared service bundles.\u202fLet\u2019s get started with a subscription model we\u2019re probably all familiar with.<\/p>\n\n\n\n

1. Freemium subscription models<\/h2>\n\n\n\n

In a freemium model, customers give up their email address and basic profile information in exchange for limited access to a product. This allows businesses to establish contact without customers needing to pay before experiencing the product.\u202f<\/p>\n\n\n\n

Email and CRM platforms, for example, allow partial access to their platform. For small organizations who need basic functionality for limited users, freemium models tend to be sufficient. Meanwhile, larger organizations may sign up in order to trial a fully functioning feature set. Ultimately, your long-term intent is to convert these subscribers from freemium to premium status.<\/p>\n\n\n\n

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Freemium is the lowest barrier to entry of all of the subscription models.<\/em> <\/p>\n<\/blockquote>\n\n\n\n

A well-established example of this is Dropbox, the cloud storage company. Anyone can sign up and receive 2GB of free storage to use, but users need to pay to expand the size of the available storage. In this model, collecting data about how customers use your services is important, since it can give you key information about the right time to offer an upsell. <\/p>\n\n\n\n

Pros\u202f<\/strong> <\/p>\n\n\n\n