Impact Pricing Podcast

Memecast #58: Value-based Pricing is the Most Profitable Strategy

The secrets to a successful subscription really are to win, keep, and grow. Traditional companies meaning those that are typically transaction-oriented, know about winning. And in fact, subscription companies have to win customers as well.  

Now, subscription companies also relatively quickly learn what it’s like to keep a customer.

Because if they’re not focused on keeping customers, that customer retention piece, they quickly go out of business, their customer acquisition costs exceed the amount of revenue or profit they can get from any individual new customer.  

“The secrets to a successful subscription business – Win, Keep, and Grow.”

– Mark Stiving

Subscription companies get the key part of win, keep, and grow, as well. However, most companies overlook the grow part. And grow means, “Can you get a customer to pay you more next year than they paid you last year?”

And that doesn’t necessarily mean raise prices. It may mean that they use more, it may mean that they upgraded, it may mean that they added more capabilities, it may mean that they bought something else. And yes, it may mean that you raised prices. 

Zoom, when they went public if you took the set of customers they had a year before they went public, that exact same set of customers paid them 40% more the following year. This is amazing. And that’s really the goal. If you want to be a real successful subscription company, you need to grow, and you need to keep, and you need to win. The secrets then, win, keep, and grow. You need to focus on all three of these revenue buckets, but you need to focus on each one individually.  

If you’ve seen any of our memes that you’d like to move to the top of our memecast list, or if you have any feedback, please email me [email protected]

Now, go make an impact.

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Tags: Accelerate Your Subscription Business, ask a pricing expert, pricing metrics, pricing strategy

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Our Speakers

Mark Stiving, Ph.D.

CEO at Impact Pricing

Alexis Underwood

Managing Director at Wynnchurch Capital, L.P.

Stephen Plume

Managing Director of
The Entrepreneurs' Fund