In the subscription economy, businesses thrive not only on their capacity to attract customers but also on their ability to retain and continually satisfy those subscribers. Central to this success is the alchemy of pricing that can entice new sign-ups and keep existing customers engaged. 

During Subscription pricing & packaging: How to optimize and implement, Matt Lindsay, CEO of Mather Economics, and I shared how this important aspect of a subscription-based pricing strategy unfolds.

As more businesses shift to the subscription pricing model, the need for pricing flexibility has become increasingly evident. However, navigating the subtleties of subscription pricing is far from straightforward, particularly as businesses scale. 

Pricing should be frictionless, flexible, and scalable. Let’s review how technology can help you deliver each–and all–at the same time. 

1. Offering the right subscription pricing model for frictionless experiences 

Pricing flexibility fundamentally revolves around delivering seamless, tailor-made experiences to customers–and not only on price setting but also on everything around it. A great example is a dog food service that allows customers to pause their plans easily. Customers are not explicitly changing the price but changing the value they get from the subscription. With control in their hands, customers can define their subscription experience. 

But the road to delivering this level of customer service doesn't end here; it must encompass every touchpoint in the subscriber lifecycle. Here, technology plays a paramount role.

  • At the moment of acquisition: Helps you identify and track visitors, set personalized pricing, and successfully convert them into trial users and paying subscribers. 

  • At the moment of renewal: By addressing involuntary churn or failed payments, technology can recover up to 72% of at-risk subscribers.

  • At the moment of cancellation: Technology facilitates molding retention strategies by offering customers upgrade or downgrade pathways and automating cancellation routines to further enhance customer satisfaction.

Quick check-in: Does your current platform automate revenue recovery processes, such as smart dunning campaigns and machine learning retries? See how Recurly can help you achieve that. 

2. Setting flexible, personalized subscription pricing strategies

As you know, personalization is paramount in today's subscription market. Businesses should adopt a pricing strategy that not only reflects the customer's usage but also their engagement with the service.

I’m not saying that you need to provide a custom subscription plan and price for each individual subscriber. You just want to have the tools and solutions in place to provide the right billing flexibility that your customers desire–and deserve.

Make sure that your technology supports all sorts of pricing, such as fixed, one-time, quantity-based, ramp, usage-based, and prepayments. Today, consumers just want to pay for what they use. This is the perfect opportunity to offer add-ons to your plans. Consider having a base plan and then allow your consumers to create their own subscription on the fly by configuring whatever makes sense for their budget.

A solid platform will give you the confidence to offer all these flexibility options, combinations, and permutations of plans. You’ll speed times-to-market and respond quickly to industry trends, consumer needs, and market dynamics.

Quick check-in: Does your current platform help you configure, launch, and test new plans and pricing models quickly? See how Recurly can help you achieve that.

3. Delivering seamless subscription-based pricing at scale

We talk a lot about friction, flexibility, and personalization. But, how do you add scale? Well, it all comes down to having a robust subscription billing and management solution in place.

What is key to note here is the need for a scalable subscription billing and management solution that can efficiently collaborate with other platforms. This, in turn, fosters personalized experiences and efficient data management.

An API-first billing platform solution that integrates seamlessly with other systems is key to facilitating smooth integration with downstream processes, accounting, taxes, payment gateways, and payment options.

Also, the right set of analytics and reporting tools could provide businesses with insights into the effectiveness of their subscription pricing strategy, thus enhancing the lifetime value (LTV) of customers. 

Quick check-in: Does your current platform seamlessly integrate with your tech stack to get a better picture of subscriber data? See how Recurly can help you achieve that.

The role of tech in effective subscription pricing strategies

In the global business scene, where a subscription pricing model reigns supreme, flexibility, and scalability enabled by technology are at the heart of winning customer loyalty. Technology not only enhances the overall user experience but also helps you write a success story.

Where to begin? Check out our virtual event Subscription pricing & packaging: How to optimize and implement to get proven strategies and best practices for pricing flexibility.