J2Store Subscriptions and memberships is a leading premium Joomla extension
You will be able to come across different pricing models in the world of e-commerce and in online transactions. One of the most common modes are monthly subscriptions and one-time subscriptions.
It is important to study the advantages and potential drawbacks of any subscription model that you work on.
Here’s a worthy reminder to start with!
“It is important to get it right at the first place”
It is not wrong to remind yourself often that the best decision can come only after researching the important factors.
The first key reminder is because you may have to face certain painful challenges in case if you want to change your pricing model halfway through. This applies to both customers and store owners.
Worthy indeed, right?
The ‘Prize’ for maintaining the right ‘Price’.
To finish off with one word, ‘Huge’.
But let’s see how.
Pricing is something you should be careful about getting it right the first time itself. Decisions on your pricing strategy is a crucial part in any of the subscription models that you work on. Thorough knowledge on audience’s demand and market research is the absolute key.
Especially if you are running subscriptions on a global basis, VAT and Taxes should be studied closely. For example, in the United States a state/ city tax rates need to be studied.
Remember that if you are a store owner, one important question you should ask yourself is “how long will people find my product valuable after purchasing it.”
If the answer is more than a short period of time, then you would want to set a high rate. American Airlines still regret that they did not do so. They set a low rate for their lifetime air passes and it didn't convert as well as they expected.
(Did you wish you had the passes? Me too)
But the Pitfall here is that, setting a rate that might be too high will result in less people who are likely to pay that high price. Naturally, most of them would want to choose a monthly subscription model instead of a single term subscription in such cases.
But a worthy and relevant reminder here might help.
Giving away products has been a successful strategy of internet companies.
Remember that this will yield long term gain (given that market research is done well).
If you offer a discount, even if it not a steal for your customers, it will boost cash flow. You will most likely learn that it is well worth providing it, especially for annual payments.
From the Joomla Store owners’ perspective
One of the biggest advantages of having a one-time fee model for your store is that it instantly generates your revenue. Your members will just pay single term to access the services that you have to offer.
They have the benefit to pick a subscription plan of their choice as per their convenience and choose to pay that as a one-off payment.
Single term subscription model also allows you to gain better insight into which are your products that are in demand and which are the ones that need improvement.
One-time payment model should be the first option for higher quality products.
When we have a deeper look at these subscription models, it is clear that single term subscription this most suitable for the most in-demand products.
It also largely depends on whom your target on. Typically, individuals prefer monthly subscriptions where as businesses usually prefer annual one term subscriptions. Needless to say offering both is a must for for your Store.
One time subscription model makes more sense for your Store if you are in need of immediate revenue.
From the Members’ perspective
The scenario is such that people who choose monthly subscriptions might mostly want to just try out the product. If they are happy with it they will stay and the ones who stay go for a single term subscription method.
One term subscriptions cost less compared to a monthly subscription or any other recurring subscription of other frequencies.Monthly subscriptions can actually only increase the cost if you are using a product on a regular basis. (check the differences out)
The dominating reason why people might opt for a monthly subscription is because it costs less for immediately benefiting from the subscription. But from a broader perspective, the thought that it costs less does not make it economic.
There is a difference isn't it!
On a long-term basis, one-off payment works out economic any day. If you are certain that you are going to use a product on a regular basis, then a single term subscription works the best for you.
Moreover, when it comes to annual fee method the best part that people like is that the payment is done on a single go and they don't have to think about it for another year.
Many people tend to stick to the ‘freemium’ model, unless they find that you are offering a real value for the money they pay.
At the end of the day, it ultimately depends on the customer’s requirements. But, if you’re still wondering how you could possibly make the difference, well, start from Key Reminder 1 again.
How to implement this on your Joomla site.
If you’re looking forward to take this ahead and implement what you just read on your Joomla site, we have exactly what you need. Just go to Subscriptions and memberships app in J2Store, which is one of the leading Joomla ecommerce solution. Membership pro extension has the following features.
- Billing schedule
- Sign up fees
- Expiry management
- Multiple subscriptions
- Create/ Modify subscription
- Automatic renewals and payments
- One time/ Single term subscriptions
- Variable subscription
- Subscriptions management
- Notification emails
And many more.