Before making a purchase, many decision makers like to have a firm grasp of what they are buying. Normally this can involve some kind of interaction with the product. With subscription software this can be difficult. A free trial may be a good way to attract customers, but it might not be the best way to convert those who take up your offer.
Therefore, other methods have to be utilised to encourage your target market to purchase a subscription. Another method is to compare your software. Comparative selling can happen on a subconscious and conscious level for the customer and there are several methods to exploit this effective selling tool.
1. Comparing Price To Everyday Purchases
Your pricing may be very reasonable, but without a tangible product for the customer to see, they may find it hard to value the offer. Comparing the product’s price to common purchases creates an impression of product value in the mind of the customer. A common comparison for a subscription is coffee.
Be careful in your choice and the frequency. Four cups of coffee a month is ideal because many people consume more than that.
2. Original Price Compared To Sale Price
To achieve great sales, stating an original price for a product and then offering a reduced price will entice visitors to convert. Often these new customers are ‘bargain hunters’ who want to find a good deal online. This works so effectively it even outperforms the rule of 9 – that is any price which ends with 9 has a higher conversion rate than that of a price point which is rounded up or down.
Therefore it is important to consider demonstrating a higher starting price and then showing a discounted price, preferably ending with a 9 for double effect.
3. Comparing To Useless Price Point
How you price different subscription plans will greatly affect your customer’s perceived value of your product. This in turn will change how they convince themselves of which plan to purchase. Research by Dan Ariely on the pricing strategy of The Economist shows this to great effect.
In the Economist’s subscription options they had three price points.
Subscription Offer One: A web only subscription at $59
Subscription Offer Two: A print only subscription at $125
Subscription Offer Three: A web and print subscription at $125.
Subscription offers two and three don’t make sense being the same but option three offers more. In the consumer’s mind, the second option becomes a ‘useless’ price point and they would be better off selecting offer three. In the study, option three had a high uptake even though there was a cheaper option available. This is because when faced with this type of scenario, consumers become value seekers rather than bargain hunters and will always seek the most value for their money.
This was further demonstrated in further research. The Economist tested what would happen if they took away option two. In this scenario consumers were more likely to purchase option one as they convinced themselves they didn’t need the upgrade.
Therefore having three options with the second option at the same price point as the most expensive option may increase your revenue.
4. Comparing Compared To Competitors
If you are in a highly competitive market you may be tempted to highlight your services or prices against that of your major rivals. This could work in theory, yet research has shown that at times, lower cost products do not always perform well against higher priced branded products.
This is because there is a consumer perception of value on the branded product. Instead you should concentrate on comparing your product’s features and benefits to that of your competitors. Consumers are more likely to buy a product which has favourable benefits rather than a favourable price.
There are several options when you want to use comparative marketing to convert your customers. The above four options are used regularly by many organisations to sell products and subscriptions. Consider what methods you can exploit in your sales process to increase conversions, income and profits of your subscription based business.