Which payment plan would you take?
 

I'm putting together pricing for my monthly subscribers. If it was something that you would sign up for, which pricing level would sound the best to you? I find that people are willing to pay more per month if the initial setup fee is lower. Which one would you select and which one sounds like a better deal?

1. $1000 setup fee and $50 a month recurring
2. $750 setup fee and $75 a month recurring
3. $500 setup fee and $99 a month recurring
4. $350 setup fee and $125 a month recurring
5. $100 setup fee and $175 a month recurring

I don't offer contracts so subscribers can cancel at any time. I can't assume everyone is going to stay subscribed, so should I get as much money up front? If I go with the lower setup costs, my yearly margin is much higher.

The software I developed is going to take videos and/or photos and post them in hundreds of galleries, tube sites, etc. You upload your video, write the description, tags, and define a link. It automatically posts it to hundreds of websites and you can save submission templates as well as time delay your submissions. It also has a feature I'm working on now that automatically watermarks your stuff. Affiliates are going to love this.

What are you selling, and what's your overhead? Have you done any market research yet?

EDIT: Just seen your reply. Sounds high maintenance. I would drop the last two levels for sure. Go for the 3rd probably.

It's really not high maintenance, most is automated. The incurred start up cost is zero. The only reason I'm doing a setup fee is because I want to recoup my original investment as fast as possible. And add some extra coin in my pocket. :winkwink:

Ohhh, it'll be high maintenance. You're posting videos, galleries, photos, etc... to a bunch of remote sites, right? Any of those sites make the slightest change, your developer(s) are going to have to modify the software.

This is why I generally stay away from any bot type of software, unless there's a developed API I can integrate it. Otherwise, it's a pain in the ass to maintain.

if its pretty much automated id either do something like
$500 setup and then $50 a month
or 250 setup at 75 a month

I think your idea on the math is flawed... If you priced it at $500/$99 and end up with 10 users that is $5000 now and $1000 a month.

If you did it at $200/$89 I am sure you'd end up with 18 users at $3600 and $1602 a month. After three months you are at the same spot and from there on you are making more than you would have before. Not to mention you can then offer specials, etc at that point to entice others to get in on the $89 monthly and increase that user base to 50. At which time you can offer a price drop across the board of $100 setup and make all new users $99 a month and grab another 20 users...

Gives you $2000 bonus and another almost $2000 a month...

V, I understand that the setup is a one-time payment so as much as I would like the big money up front, the real pay off is in the monthly fees. Below is the pricing breakdown I came up with before posting this thread:

$1000 + (12*50) = $1600
$750 + (12*75) = $1650
$500 + (12*100) = $1700
$350 + (12*125) = $1850
$100 + (12*150) = $1900 - must sign up for 6 month contract

After the initial setup fees are assessed, the obvious best for me would be the $100 setup and $150 per month. I think the real question is do I want most of the money up front or rely on the monthly fees and hope I am able to retain customers. The $100 setup has to agree to at least a 6 month contract.

Right now I am leaning towards the $350 setup and $125 a month. And to help lessen the initial hit, break the setup fee into 3 monthly payments so I can get more sales.

if you can make the money the other way, and keep the product free, that's the best way/google way...

Anybody who can count knows that option #1 is the cheapest way to go if they plan to stay with you for the long term. In addition its good for you because you get a high payment up front which I'm sure covers the typical setup costs and hand-holding you need to do with each customer.

Mark, you hit the nail on the head. The only problem is that a majority of the people signing up won't know simple math if it knocked on their door and fucked their wives and impregnated their cats.

Psychologically speaking, a lot of people are intimidated by large upfront numbers. If you can make it manageable and worthwhile (explain that one sell will cover their monthly payment), then it's easy. But telling someone they have to pay a grand to get started is usually intimidating to most. This isn't designer clothing where I can charge a premium upfront...I have to find a middle ground where I'm making some money up front and more money on monthly charges.

For example, if you went into a Ferrari dealership and they told you that you had to put $50k down and your payments will be $500 a month sounds a lot better when you say it's a $1k down and $1,500 a month. Once they hear $1k down and you're driving this car, it's game on. They don't think about monthly payments because chances are they will only make one or two payments.

You see my quagmire now?

why the big upfront cost? new senuke is 140 a month with no upfront cost.