After the plethora of interviews these past few months, Ron and Ed return to their examination of the subscription economy. They looked at new subscription offerings they have collected including some in professional firms as well as the overall state of subscriptions in the face of C-19.
Subscription Economy Update
Ron’s sees his recent webinar audience moving beyond the “how to” questions about the subscription economy. These ideas are resonating.
Ed ran a CPE webinar called “Sell your brain, not your time” and the questions were more about the implementation of subscription pricing as opposed to a defensive posturing.
People are starting to go beyond the three choices for subscription. It starts to get confusing around 5 and you’ve lost them at 6 or 7. There is a propensity towards moving towards 3 subscription prices but with a toggle like annual vs monthly.
You can’t have a $50,000 a year customer and a $500 a year customer at the same time. This is obvious with subscription pricing but, honestly, you shouldn’t do it anyway!
A lot of the questions implicitly imply that their firms don’t have anything of value in which to compete. But how do they compete now? If you have customers now, you obviously have a value proposition. You just need to tease out the value proposition.
Jody Grunden, Summit CPA, removed growth constraints with a subscription model. He grew the firm from $600,000 in revenue in 2004 to $7,000,000 today! https://www.thesoulofenterprise.com/tsoe/subscription-pricing-summit-cpa
Can you have value pricing 1.0 (pricing the customer) and value pricing 2.0 (pricing the relationship) in the same firm? Ron’s long term answer is no. So is Ed’s. Maybe you can have one-offs, but the ultimate goal is to have a relationship with the customer, not a transactional relationship.
Areas of specialization in larger firms provide an opportunity for various subscription offerings. The Apple One service is a great model for professional firms to leverage.
Recidivist guest Rabbi Daniel Lapin has a subscription pricing option now at WeHappyWarriors.com
Tien Tzuo has been talking about freemium vs free trial in his newsletter: When it comes to freemium vs trial there is a clear winner. It’s a free trial. Freemium users have not bought into the value of your services.
Something that feels obvious but needs to be said: Psychology and behavioral economics play a big role in subscription pricing.
A question to ponder: Would you subscribe to a pharmaceutical company? Yes, and we may start to see experiments in this area.
Americans tend to underestimate their subscription spend by 1/3rd according to a new study by The Atlantic
Tien Tzuo has also been writing about how “every day is prime day”. Here is the full post: https://medium.com/@tientzuo/every-day-is-prime-day-2322a6867d0
Unbundling of the automobile: https://medium.com/@tientzuo/the-unbundling-of-the-automobile-8a43bad390d3
Bonus Content is Available As Well
Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.
Click the “FANATIC” image to learn more about pricing and member benefits.
This week was Bonus episode 317 - “Non-POTUS election results”. Here are some of the links we discussed: