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How Much To Charge Monthly?

by BMGGT13
9 replies
Wanted to get some good feedback...

After six months of cold calling and making some great sales, I am looking into adding a monthly option for my clients that don't have as big of a advertising budget.


My clients are local businesses mainly hotels, restaurants, attractions etc.

So for example if I had Product A which included XYZ and I charged $100 per year for this as a one time fee...


If I wanted to charge monthly for the same product and it also included XYZ what should I charge monthly for it?

Obviously I understand them having 12 times to cancel when the product automatically gets charged every month.

But should I charge $10/mo? So the total would come to $120 for the whole year? Or should I charge $8.33 which comes to $100?

I want them to see the better value is purchasing the product for $100 and not the monthly.

The only reason why I am thinking of adding the monthly option is because my packages are more than $100 and to some businesses paying a one time fee of $500 is a lot of money at once.


Thoughts? Advice? Greatly appreciated!
#charge #cold calling #monthly
  • Profile picture of the author agmccall
    While you have to make the final decision on the pricing, I would say that anyone that pays in full should be getting some sort of deal. A good example would be web hosting plans. You will notice the more you purchase up front the cheaper the monthly amount is. You also have to consider making in worthwhile for someone to pay in advance. If I was only going to save a total of $20.00 on a $500 I would opt for the monthly plan to keep my money with me, but if I was going to save $100.00 I would really consider paying in full.

    Just my thoughts

    al
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    • Profile picture of the author Kay King
      My clients are local businesses mainly hotels, restaurants, attractions etc.
      Why do you want to go to monthly payments? Selling b2b I wouldn't do it at that price point. Like you said 12x to cancel - but also 12x to have to make a payment or cut a check and do the paper/computer work.

      If you need an alternative to annual payment - why not make it quarterly and have a good cut for annual payment.

      $45/quarter
      $150/year
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    • Profile picture of the author Steve B
      Pricing is never the most important decision that a customer makes.

      Getting that prospect to buy from you should be your first concern.

      If the value is there and the customer sees that value as a bargain for the money, he/she will find a way to meet your pricing.

      Figure out what kind of customer you want and then charge accordingly.

      Many businesses use pricing to weed out the type of customers they don't want (those that can't really afford the product or service).

      Steve
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  • Profile picture of the author technomatters
    Basically it is all up to you.

    Just calculate the cost of the work it involved, how much time you spend on the work per day, week or month.

    You haven't disclosed the service, so it is very difficult to calculate. If it is SEO or complete Digital Marketing Services, the price is different

    If it is reputation management the price is different.

    On final thought. Always calculate your man hour, you will get a price for your service.

    Based on that
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  • Profile picture of the author BMGGT13
    I would consider charging quarterly but everything is done through PayPal. And for subscriptions with PP that isn't an option. Any ideas on how to change that?

    No paperwork is really needed once someone signs up. I am not going to showcase the monthly options, I am just going to use them if and when someone says they can't afford a one time payment of $XXX.00.
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    • Profile picture of the author Sid Hale
      Sure it is...

      Originally Posted by BMGGT13 View Post

      I would consider charging quarterly but everything is done through PayPal. And for subscriptions with PP that isn't an option. Any ideas on how to change that?
      Set the Billing Cycle to 3 Months.
      Last time I looked, a year had 12 months. 12 Months / 4 = 3 Months
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      • Profile picture of the author BMGGT13
        Ok I just found out how to do that... So should I make it more expensive monthly? Still want to try to get the whole deal. Instead 3 months would be a little more if you times that number by 4.

        Originally Posted by Sid Hale View Post

        Sure it is...



        Set the Billing Cycle to 3 Months.
        Last time I looked, a year had 12 months. 12 Months / 4 = 3 Months
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        • Profile picture of the author Sid Hale
          Absolutely,

          Originally Posted by BMGGT13 View Post

          Ok I just found out how to do that... So should I make it more expensive monthly? Still want to try to get the whole deal. Instead 3 months would be a little more if you times that number by 4.
          I can't think of any situation where you would not want to offer a substantial discount for the full year commitment.

          In fact, maybe that's the way you should try to approach it, mentally...
          Figure out what you want to charge per quarter (recognizing that some number will sign up for 1 quarter and then let their subscription lapse). Then figure your annual price at a 15-20% discount.
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  • Profile picture of the author Mark Singletary
    I'm not sure if it's a budget issue or a perceived value/ROI issue. The smallest of businesses routinely spend $100 on things like toilet paper or business cards - things they need or want.

    Are you sure budget is the real issue?

    Mark
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