Recently we started a series of posts on different monetization, or pricing strategies. The first in the series described the Freemium+Upsell model, where a business has a free-forever version of their product or service, but also offers a more feature-rich version at a cost.
In this post we’ll turn our attention to the Multiple Editions strategy.
This approach is very popular, especially for, (but not exclusively to, SaaS services). Basically, in this model you would create different packages for different people, and let them choose the one that is right for them.
The price of the different packages offered can be based on many factors, usually dictated by the type of service the business offering the multiple editions is selling.
For example, in this image showing multiple editions, you can see the price you pay depends on the number of customers you have.
Cell phone/and or online data price packages are usually based on usage.
This can either be the number of minutes you use, the amount of data you use, or a combination of the two.
Also popular is to offer various editions based on the number or type of product features. To access ‘premium’ features, customers would have to choose a package with a higher price tag.
In this example, you can only access all of the features of the service if you choose the Gold Listing Package which cost the most.
Depending on your needs, the premium features may not have any value to you, so you’re not forced to pay for features you won’t use.
Whether or not the multiple editions price strategy is right for your business really depends on your business offering. Traditionally, this strategy works best when your offering a service like one of the three examples above, as opposed to a physical product. That said; there are of course exceptions. For example if you had a weekly or monthly vegetable box delivery service, you could use the multiple editions strategy based on the amount of vegetables in the box, or type of vegetables, etc.
How your business processes payments could also be a factor. If you’re not set up do easily handle recurring billing, you could be getting yourself into an accounting and billing operations nightmare. Make sure you can easily create pricing plans combining one-time, recurring, volume, and usage based charges before choosing the multiple editions pricing strategy.