Monthly and Yearly Pricing
You must have noticed that almost every service you signup to has either Monthly pricing, or Yearly pricing.
This may seem relatively obvious, but capturing a yearly customer is farrrrr better than a monthly customer!
✅ You only pay fees once.
✅ Collect all the money up front.
✅ No churn from expiring credit cards.
✅ You keep the customer for a full year.
Getting a yearly customer is so much better, that companies will usually give you 2 months off the purchase price if you pay by the year.
For example look at this ConvertKit email to upsell a yearly plan for my account:
✔️ The copy gets straight to the point.
✔️ It makes an offer for 2 months free to upgrade to yearly.
✔️ It has a call to action that makes it easy for me to accept by saying, "Just click here and we'll take care of the rest!"
Using this recurring revenue calculator you can see why yearly is so attractive.
Here's a $97/month product, with 100 subscribers. If each member stays on for one month, total revenue is $9,700:
However if you manage to bill people for a year, that same 100 subscribers at $97/month could be worth $116,400!
...and that's why you see so many subscription services incentive people to do yearly plans.
✔️ The copy gets straight to the point.
✔️ It makes an offer for 2 months free to upgrade to yearly.
✔️ It has a call to action that makes it easy for me to accept by saying, "Just click here and we'll take care of the rest!"
Using this recurring revenue calculator you can see why yearly is so attractive.
Here's a $97/month product, with 100 subscribers. If each member stays on for one month, total revenue is $9,700:
However if you manage to bill people for a year, that same 100 subscribers at $97/month could be worth $116,400!
...and that's why you see so many subscription services incentive people to do yearly plans.
Image Description
A simple illustration comparing two pricing options: "Monthly" and "Yearly." The Yearly option is highlighted, suggesting a better deal.
Positive Aspects
The image effectively visualizes the concept of choosing between monthly and yearly pricing, emphasizing the yearly option as more advantageous. It's a straightforward, eye-catching illustration that complements the article's message about the benefits of yearly subscriptions.
Key Takeaways
- Yearly subscriptions are more beneficial for businesses due to upfront payment, reduced transaction fees, and lower customer churn.
- Companies often offer incentives, like two months free, to encourage yearly subscriptions.
- Yearly billing can significantly increase revenue compared to monthly billing, as demonstrated by the revenue calculator example.
- Effective copy and calls-to-action can successfully upsell customers to yearly plans.
Additional Insights
Think of yearly subscriptions like buying in bulk at Costco. You pay more upfront, but you save in the long run. It's a win-win for both businesses and customers if the service is top-notch. Plus, who doesn't love a good discount?
