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Charge Monthly or Annually For Online Content

by mikesaif
17 replies
We are putting together some online content...over a 1,000 pages with new material added every month.

Has anyone any experience with what works best, charging annually or monthly for this. We were thinking $3.99 monthly or $45 annually. Obviously, if charging monthly is the best way, then we would increase the annual fee to make it more. I realize that if our cc processor charges a fee per transaction then this would affect the decision.

Any thoughts or help would be appreciated.
#annually #charge #content #monthly #online
  • Profile picture of the author kposs
    Well, I don't have any real results to share, but from the consumer's perspective, the $3.99 per month is a much easier buying decision than the $45 per year, I would think. It's something I personally would do without worrying about whether not I'd 'forget' to cancel it. I wouldn't miss the $4 if I did.
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  • Profile picture of the author Xenaco
    Another option is to sell a $45 or $xx dollar Annual Subscription but offer some other payment terms. For instance, say you have a $120 annual subscription. You can sell only an annual subscription but charge $30 per month for 4 months or $40 per month for 3 months. This way the customer looks at your site as a continual (at least one year) resource rather than a short term resource. Once the scheduled payments have been made you can forget about billing until you have an upsell or renewal.

    You need not limit the payments to monthly. You could bill twice monthly for 2 months. You are not limited to calendar periods for cancellation.

    As long as you continue to provide useful and valuable information on a regular basis the members will stay interested. You can collect your annual subscription amount within the first 3 or 4 months so that members don't link in the short term.
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  • Profile picture of the author Richnana
    Why not offer both. I have the option on most membership sites to offer a DISCOUNT for a year. The higher price is if a person decides to do monthly payments. Why not give your customers a choice
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  • Profile picture of the author InternetSuccess001
    Easy.

    You offer a monthly rate, then a yearly rate with anywhere from a 10-25% discount.

    Works very well.

    - J
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    • Profile picture of the author paulie888
      Originally Posted by InternetSuccess001 View Post

      Easy.

      You offer a monthly rate, then a yearly rate with anywhere from a 10-25% discount.

      Works very well.

      - J
      Exactly, you want to give the customer options. You can offer a monthly rate, as well as charge upfront for a quarter, half a year and a full year (with appropriate discounts of course).
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  • Profile picture of the author Michael Oksa
    One of the problems I have had with yearly memberships is people sometimes forget what they subscribed to a year ago.

    While it would be great if everybody took full advantage of what you are offering, some will only use it for a short while, then won't come back.

    Offering both is a good option though; with a discount for a yearly subscription.

    Also, the regular payments you get from the monthly subs are nice. However, this also gives people the opportunity to be reminded to unsubscribe 12 times per year as opposed to just 1. (Assuming it's something they were considering in the first place)

    Out of curiosity, will this be high-quality, original material? If so, $3.99 per month sounds rather low to me. Either way, don't be afraid to test different pricing models to see which one brings you the best return.

    All the best,
    Michael
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  • Profile picture of the author warriorkay
    I'd say $3.99 monthly will look easier for
    lots of people. About the yearly price, you
    will be surprised that lots of people won't
    go for it, even though it will save them
    money at the end of the day. Most
    people prefer to pay little monthly, rather
    than a lot yearly,

    Kingsley
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  • Profile picture of the author good2go4
    Yes I thought your prices where a little low for quality material - by offering different payment options to your prospective customers you are letting them set the benchmark of what they want to pay. Yes you will get unsubs when you are using the monthly service, but realistically you don't want people on your site if they are not happy with the service. So I would do what has been suggested here about offering different payment options and enjoying a monthly, quarterly and annual income boost.

    Best of luck
    Lisa
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    • Profile picture of the author mikesaif
      The reason I asked originally was I wondered if one was better than the other for keeping subscriptions. In other words, will collecting an annual subscription result in fewer renewals than something collected monthly.

      I see the following positives and negatives.

      Yearly subscription -
      Positives - Once they subscribe, they pay for the year so I am guaranteed 12 months of subscription per customer. They won't think about canceling at least for year.

      Negatives - An annual fee is larger than monthly and might turn off people from subscribing. At renewal time, they might think twice because of the high annual cost.

      Monthly subscription -
      Positives - It's such a small amount that it makes it an easy decision to subscribe. With it being a small amount, it's something the won't bother with each month...even if they think about canceling, it might be too much effort to go about it for such a small monthly cost. Seeing the amount on the cc statement will remind them to make use of the material on the site.

      Negatives - I only collect a smaller amount each month rather than up front. Might be additional cc fees per transaction. Seeing the charge on the statement regularly might cause them to cancel.

      Any thoughts on other positives and negatives?

      I don't mind giving a discount if they pay monthly as long as that is more likely to generate better renewals and more subscriptions. Thoughts?
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    • Profile picture of the author mikeyman120
      1000 customers @3.99/month = $3990/month or $47,880/year

      1000 customers @$47/month for high quality = $47,000/month or $564,000/year

      2000 customers @$47/month = $94,000/month or $1,128,000/year

      5000 customers @$47/month = $235,000/month or $2,820,000/year

      10,000 customers @$47/month = $470,000/month or $5,640,000/year

      If those big dvd rental services can get 13,000,000 customers surely you can do 10,000.

      Any way I would think big with a membership site. The potential is awesome.

      Also if its high quality product then at $47 it should have higher perceived value. So decide if you want just a regular yearly wage or job crushing income. I would go monthly!

      Mike
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      • Profile picture of the author mikesaif
        Thanks Mikeyman. I can do the math. My content is for a niche market and is valued around the prices I have mentioned. Still doesn't answer what is likely to result in more revenue, monthly are annually?
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        • Profile picture of the author JDArchitecture
          Just a bit of advice about your launch. I would not start with all of your content. Hold some back for a rainy day or to make life easier on yourself for certain periods.

          IMO, if you advertise 500 pages it will be just as effective as saying 1000 pages. Then, if you add 10 pages per month, you already have over 4 years of content ready to go.

          Then you can concentrate on promotion instead of content.
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          • Profile picture of the author mikesaif
            Originally Posted by JDArchitecture View Post

            Just a bit of advice about your launch. I would not start with all of your content. Hold some back for a rainy day or to make life easier on yourself for certain periods.

            IMO, if you advertise 500 pages it will be just as effective as saying 1000 pages. Then, if you add 10 pages per month, you already have over 4 years of content ready to go.

            Then you can concentrate on promotion instead of content.
            Thanks for the advice. We actually have over 2,000 pages with content coming in monthly so it will be a continual focus on promotion over the next few years.
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  • Profile picture of the author waken
    Annual payment ease your cashflow and gives you access to more funds for investment in other projects. But annual payment usually being offered at a slightly discounted rate vs monthly x 12.
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  • Profile picture of the author levmonch
    Its always good when you have couple of offers and different offers that will suit the customers..
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  • Profile picture of the author Sam1985
    You should required to give some special discount on actual cost you've decided......
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  • Profile picture of the author sidpoudyal
    Originally Posted by mikesaif View Post

    We are putting together some online content...over a 1,000 pages with new material added every month.

    Has anyone any experience with what works best, charging annually or monthly for this. We were thinking $3.99 monthly or $45 annually. Obviously, if charging monthly is the best way, then we would increase the annual fee to make it more. I realize that if our cc processor charges a fee per transaction then this would affect the decision.

    Any thoughts or help would be appreciated.
    If that is all you are going to be charging then I'd stick with simply offering the monthly payment plan. For all the customers that stay past the first month you could offer them the next 11 months for $40 with an option for $45/year after that first year.

    There is no way to tell how circumstances will change in the next year so you want to lock in yearly subscribers but offering that option right away could be a turn-off for those on the fence. Hope this works out for you.

    Kind Regards,
    Sid Poudyal
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