Re: One time vs. Recurring Billing

From: Marco Janeczek <info_at_webadvertising.ca>
Date: Mon 06 May 2002 12:21:27 -0600

That depends.

1) How much is your service? Lets say you are a daily
newsletter publisher (investment) and you want to introduce
pay-for-content. So, if lets say you say $9/month... people
will buy it (cheap), but if you say $ 100 / year people will
not. The catch is when they subscribe to offer them just one
option to pay-yearly / semi-anually. In this way you get more
time to improve (if you have to), and if they like it they
will extend their subscription.

Remember. $9 is around the price of two good magazines. But
the content is provided daily (many times), so its worth it.

Lets say you charge your newsletter $9. You have 1000
subscribers. If they pay yearly you give them 10% discount.

MONTHLY YEARLY
1000 x $9 x 12 1000 x $9 x 12 - 10%

Revenue $108,000 Revenue $97,200

The only difference here is that in yearly you are guaranteed
that sum, in monthly you are not. Maybe 50% of subscribers
will not continue after the first two months or even one month.

By paying a yearly fee (if reasonable price) you have a good
way to improve your content more so that the consumer renews the
subscription.

>From a business model, for a magazine its better a yearly
billing, but for a service its better a monthly billing. Please
specify the exact service.


2) Monthly, Quarterly, Yearly ? This question is also to be
determined exactly if you specify the service/product you are
providing. If its stock alerts, business news, hosting... all
that differs.

Marco Janeczek
WebAdvertising.ca
a Mazata.com Company








Received on Mon May 06 2002 - 13:21:27 CDT