Hi,<p>We currently have an annual subscription plan for our pro accounts at Muziboo - http://www.muziboo.com/pro ..<p>I was wondering if having a monthly subscription plan (ex. $4.99/month, cancel anytime v/s $49.95/year) increases conversions. Has anyone conducted such an experiment or seen a study?<p>Also, would this depend on whether this is a B2B or B2C app?<p>Thanks!
I think it depends more on the complexity (conceptually) of the product and the cost. A user might be more inclined to commit for a shorter trial period and test the usefulness of the premium features - for consumers, 'cost of a latte' seems to be a much easier decision to make than $50. There are also other parameters you can tweak, the first one that comes to mind is the utility of the free offering, especially for a community site - more users means more network effects, more community participation and more opportunities for conversion. Right now your free offering seems to be drastically more limited than the pro account and that might be something you could play with.
I'd recommend testing your hypothesis. A pure split test (A/B) doesn't quite seem right, because it'll be more difficult to compare w/o doing some sort of multivariate regression.<p>I'd suggest this: peel off a small segment (10%, 20%) randomly out of your user base. Give them the option for monthly / annually. Compare the revenue from that group to the revenue from your control group. Even if you do anger a few of your customers, or the monthly plan costs you a lot of sales / revenue, you've only done it with a small section of your audience.<p>The only downside to this is that you might find some customers prefer the monthly plan, even if you only want to offer the annual (after testing, you find that annual is more profitable to you).<p>Each site is different. Each customer base is different. This seems to me like a situation where you should collect data, rather than look for high level advice.
It is best to have the 2 options available. Monthly a bit more ex. so that users can use and terminate anytime they want. The yearly option for your hardcore fans, of course, it should be a bit cheaper. So far this work really well for me.