Vision Report

The Four Qualities Of Best-In-Class Subscription Pricing And Packaging

Connecting Price, Value, Growth, And Profitability

May 14th, 2021
Lisa Singer, VP, Research Director
Lisa Singer VP, Research Director
With contributors:
Jeff Lash , Duncan Jones , Sam Somashekar

Summary

Driven by the benefits subscription-based businesses bring to buyers and sellers, these businesses have grown quickly over the past decade and are expected to expand further in the near future. According to a recent CFO Research study, more than half of senior finance executives surveyed report that at least 40% of their current revenues are recurring, and these leaders expect additional rapid growth. But the benefits of a subscription-based model can be realized only if pricing and packaging are value based and optimized for a subscription business. Pricing and packaging must be as simple and transparent as possible, promote retention and account growth, monetize buyer value, and drive a profitable business for the seller. In this report, we identify the key qualities that packaging and pricing for subscription businesses must have to drive trust, fulfill buyer and seller needs, and ensure a long and profitable customer relationship.

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