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January 24, 2012 07:35 PM

Categories: Sales and Distribution

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nj

Member
Joined: 01/24/2012

Hello,

My company produces an educational software program, which till now has been sold in desktop version only (typical retail $39.99 to 58.99). The desktop version has sold about 100K copies over the last 10 years - it is quite popular with students, homeshcooling parents and schools.

With desktop sales slowly (but unfortunately consistently) declining, we have created an online /mobile version of the sofware, and we are trying to find an optimal way to charge for it. I would appreciate very much your comments on the following 3 possible setups.

Visitors are funneled to all setups via free (limited) version of the software. One-off fee option is not included as it seems inappopriate (since software runs on our own servers).

Setup 1  (this is what our main competitor does)

 Free 1 week (or some other period) trial for full mobile/online version after which the software reverts to 'result-only' unless additional time is purchased (i.e. 1 week is 4.95, 1 month 9.99 etc). No credit card required for initial free trial; subscription is not automatically reinitiated (customer has to 'add time')

Setup 2  (I have it set up this way on some sites for desktop version of the software)

Straight subscription i.e. 9.99 a month until canceled (from desktop sales I know that the 'value' of avg customer in this setting is around $36.00). This can be combined with 'first-subscription-period-free' offer. Credit card details taken upfront (even with first period free),and subscription is automatically renewed.

Setup 3 ('hybrid')

One week free like in  setup 1. Close to expiration, customer gets a 'would you want another week for free' email - but this time it will be as a subscription model (they have to submit cc details although they are not charged right away)

Anything else?

Any help will be greatly appreciated

Regards

NJ

Discussion:    Add a Comment | Comments 1-3 of 3 | Latest Comment

February 1, 2012 7:16 PM

There is no one right or wrong answer to this. Right now you are guessing; the beauty of SaaS-based software is that this you don't have to just do what feels right--you can test it. Set up a test using one of the many free or cheap A-B tools out there, or simply try them one at a time if you don't mind being less scientific.

The one thing I will comment on is that your SaaS pricing seems quite high relative to what your (very successful) desktop pricing was. I think this could impact your results more than your pricing/free trial format.

Phil Morettini
PJM Consulting
Moretti on Management Blog
http://twitter.com/TechnologyGuy
+1 858 792 1062

February 1, 2012 7:18 PM

By the way, is this Neven?

Phil Morettini
PJM Consulting
Moretti on Management Blog
http://twitter.com/TechnologyGuy
+1 858 792 1062

February 1, 2012 7:52 PM

Phil,
Yes, it's me :-)

You are right - testing is really the only way to tell - in fact we have already started implementing a pretty robust testing scheme with a lot of different testable options. It will be interesting to see what the results are.

I will take into consideration different pricing. The initial amounts were based on what my main competitor does (for the same pricing we actually provide more service)

Regards
Neven

Discussion:    Add a Comment | Comments 1-3 of 3 | Latest Comment

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