April 4, 2011 | Authored by: Vindicia Team
Data, Insights, and Best Practices
The volume of data that now flows through CashBox (over $2bn worth last year) allows the marketers at our client companies to truly understand what’s happening in their business and compare it to the broader universe of the digital merchants that we service.
I’ve discussed in the past how SaaS Billing is really a Marketing asset, not just an operational necessity. We’ve also been extremely vocal about the need for our clients to focus on long-term customer lives, whether this be for a subscription-style service or for a microtransaction service that uses a virtual currency.
Here is an example from an existing client that illustrates the importance of data. The chart below represents a cohort analysis of the subscribers to their 1-month plan. What it shows is that the average lifetime for subscribers to the monthly plan is about eight months or so. This client, however, does not offer an annual price plan and asked us whether we thought it would make sense. Based on this data, we said that if they offered a plan that generated more revenue than their average monthly lifetime value and that was at a discount to the annual value of their 1-month plan then, yes, it would make sense to do so assuming it fit with their business goals. To put this into concrete terms, if their monthly plan was $10/mo, they could offer an annual plan anywhere from $81 to $119 and have it still make economic and subscriber sense.
We learn a lot about consumer behavior through our clients and the relative importance of changes to product and pricing mix on subscriber acquisition and retention, and look forward to sharing more of these insights on this blog in the future.
Which billing platform is right for B2C subscriptions?Download