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Another Pricing Perspective

Another Pricing Perspective

September 6, 2006
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One of the XBIZ Moderators that I enjoy chatting with is Joe Fredricks, a gentleman beyond photography and operating in online adult entertainment, I share a love of custom Harley Davidson motorcycles with.

Joe contacted me last night, offering a different perspective on ‘trial’ pricing in response to my post yesterday, “Pricing a Peek,” which I’d like to share with you today:

Joe’s site’s standard membership is $19.95 per month. On top of that he offers members a recurring “loyalty” discount of $5.

Joe claims that this effectively slows down the guys that cancel as soon as they join, since staying a member only costs $14.95 as opposed to the single month price of $19.95 – a strategy that works pretty well for him; so much so in fact that since he started doing it, his one-month memberships dropped from 60 percent to 48 percent – a full 12 percent increase in initial membership renewals.

As an added benefit, since the discount applies from month to month, not just initially, his average retention rate more than doubled, going from two to five months, which adds substantially to his bottom line.

According to Joe, “I guess customers just like the idea of being appreciated.”


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