In episode #756, Eric and Neil discuss whether it is better to charge a monthly fee or a one-time fee. Tune in to hear which is more lucrative.
TIME-STAMPED SHOW NOTES:
- [00:27] Today’s Topic: Is It Better to Charge a Monthly Fee or a One-Time Fee
- [00:40] If you have a monthly fee, look at the lifetime value of your customer.
- [00:45] Think about charging a one-time that is more or equivalent to your LTV and see if that generates more revenue.
- [01:05] People like the concept of a one-time fee.
- [01:24] It’s a much more appealing marketing message.
- [01:33] You have to be testing!
- [02:37] If your average customer only lasts one year, it’s more beneficial to charge up front.
- [02:56] Neil tested out up-front payment and a payment plan and found that up-front was the best system for his business.
- [03:25] If you charge a one-time fee for a lot of stuff, this holds greater appeal.
- [04:05] It’s all about the lifetime value of your customer: this is the best way to determine your pricing structure.
- [04:43] If you’re doing a subscription thing, you can use a dashboard that will track your clients and payments.
- [05:04] Price Intelligently is a great resource.
- [05:18] If you want to try a monthly fee, consider sticking with an up-front fee, but test it out first.
- [05:40] That’s all for today!
- [05:44] If you could take two minutes out of your day, we are trying to improve the listening experience for you, so go to Singlegrain.com/survey and help us gain some insight into what matters to our listeners.
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