Unveiling the Secrets of Pricing Models: Insights from 50 Leading Consumer Software Companies

I did a deep-dive on the pricing models of 50 leading consumer software companies.

You can find the deeper analysis in the newsletter.

These are the top 4 takeaways:

1 — Subscriptions have come to every industry

In every industry, it’s always worth considering if a subscription makes sense for you.

Recurring revenue, stable cash flow, and higher LTV are all potential prizes.

But, consumers might be annoyed.

2 — Subscriptions aren’t the only game in town

Yes, subscription or “subscription-like” pricing is 56% of this list.

But other options such as one-time fee, ad-supported, and transaction-based pricing also appear.

And consumers often prefer them.

3 — Industry determines your choice set

If no one is using transaction-based in your industry, you can view it either as “not such a good idea,” or an opportunity for counter-positioning.

I actually love counter-positioning. Think: 37Signals’ ONCE brand vs regular SaaS.

4 — The Yin to Your Models’ Yang is your strategy

On top of your model, you should also layer on strategies.

Things like:

• Free trials: 52%
• Freemium: 40%
• Dynamic Pricing: 30%
• Drip Pricing: 28%
• Reverse Trials: 6%

Too often, the pricing story is simplified into “we have to be subscription.”

Often, it is the right choice. But there’s also a litany of other options.