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Choosing a Price Plan for Subscription-Based Web Services and Applications

If your business model is based on recurring subscriptions for services and apps, the biggest challenge you will face is getting people to join.  This is where your pricing plan for different types of subscriptions, that involve varying prices and features, plays a main role.
The start-up business model of websites on the internet is gravitating towards a recurring subscription-based economy.  Therefore, a competent pricing plan is very important.  Here we will discuss some best practices and tips to create and test pricing plans for your internet based subscriptions for apps and services.
Price Plan Testing
Testing and gathering data for improving a product is a top priority in the designing of a web-based service or app.  Particularly, since enhancements can be performed at any stage, so they can be saved for a later time.
With respect to creating your pricing plan, it is crucial to test it first, in order to ensure that optimal revenues are generated from it.  To test a pricing plan use A/B testing.  This test will let you know the amount of sign-ups obtained from different prices.  You can access this free tool by using Google’s Website Optimizer.

Price Components Testing

Test the effects of increasing or lowing the price of your software.  As well, monitor whether or not you receive more sign-ups if you raise the price with a number that ends in a nine.
Subscription Plan Testing

You can design intelligent pricing plans to assist your customer to pick a plan that is appropriate.  One method is to use a plan that is in the mid-price range to get users to buy a more expensive plan.  When someone compares two plans, they will weigh the price difference with the amount of products or services they receive.
For example:  If you have one plan that is $49.00 along with one that is $59.00 people will compare what they are getting with each.  And they often will choose the higher plan, because they receive more services.

Free Plan Tips
Besides the use of paid subscription-based plans, offering plans that are free together with ones that are paid is also an option. The name for this type of pricing plan is a freemium model.

The point of the free option is an easy one – to increase the number of users.  The reasoning behind it is that when a business is starting up, they don’t need the same things as larger companies and their budgets are much lower.
The free plan helps the smaller companies reduce their risks by trying out your software, without having to hand over any money.  As the business and its needs expand, they will be in a position to upgrade and make a paid purchase from you.
To differentiate between plans from paid and free use resource throttling.  Allow users to use all or  a majority of the application features, but provide limits of usage.
In the event that you need to DE-emphasize the free plan’s availability, without abandoning it, reduce its visibility on your website.

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