I'm building a database to sell information on employment contracts and comparisons (terms typically found, what they mean, analytics on what percentage of people have them, etc) and am trying to figure out my pricing strategy. Users submit their information to get our information (similar to Glassdoor), so volume is important early on to continue building up the database. I've always read that 3 pricing options is the way to go - Low, Medium and High. What are the pros and cons of a transactional (one time) model versus a subscription model? How do you price this out if you offer both?

If you anticipate customers returning regularly to query the database for fresh information, then subscription pricing may be your best bet.

As a single transaction, the cost to the customer would need to be 12 times as high just to equal the revenue from a 1-year subscription. Since $600 up front is more intimidating than $50 per month, this will deter signups. Customers are more reluctant to try out a service with a high price tag.

Meanwhile, if paying $50 allows them to experiment with your database, they'll be more likely to begin. And to continue.

Using a subscription model has other advantages. You can retain greater control over your database by dishing it out only incrementally to subscribers, query by query.

Also, you'll gain a lot of useful intelligence on how customers use that database if you steer them to an in-house portal. I'm not talking about individual customer profiling. You can respect user privacy but simultaneously learn what customers want, expect, or need from your database / interface. That allows you to improve their experience.

Answered 7 years ago

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