Archive | June, 2012

Why Metered Pricing Models Maximize Revenue

Maximizing revenue from digital subscriptions is dependent on monetizing usage rather than the users themselves. Comparing print subscriptions to digital subscriptions highlights why usage behavior is the basis of revenue, and applying the principles of yield management shows why metered pricing models produce the most revenue. Why Usage?  Comparing Print vs. Digital Subscriptions Based on the fact that print is a physically distributed product and digital is an on-demand service, print subscriptions differ from digital subscriptions in three critical ways: Fixed vs. Variable Content Delivery.  The print product has a fixed definition of content delivery which is received by every customer that purchases a subscription. A digital service has a variable definition of content delivery because usage varies across customers. […]

How to Measure and Evaluate the Efficiency of Your Pricing

Segmentation in all pricing helps companies develop targeted plans for different groups of customers. Segmentation can be based on demographics, firmographics, or behavior.  From Scout® Research’s benchmarking, demographic and firmographic segmentations consistently underperform behavioral segmentation in yielding the maximum revenue. How much opportunity exists to increase revenue from behavioral segmentation? The following infographic illustrates how to measure and evaluate the efficiency of your pricing. The infographic analyzes the efficiency of pricing for an online market research service where pricing is based on user roles, for which one specific role is defined to be $100/user/month. The service has 20,000 of these specific users which generates $2,000,000 of revenue per month. As with every service, users have different behavioral patterns that can […]