Market Research
Subscription Marketing Strategy
The first foundational marketing initiative you must complete is market research. By determining your target audience and positioning within the competitive landscape, you can better determine how you truly benefit your audience. Whether you are launching a new business or starting a new marketing initiative, creating or revisiting your business’s market research can help you better serve your customers.
audience
Who is your target audience? And what do they need? To answer these questions, look beyond demographics to better understand what makes them tick. Look beyond the scope of your services to determine other ways you can help them with your services, customer service, and more. This is vital information you need to know before beginning to develop your messaging and positioning.
If you’re unsure where to begin, start asking your current and previous customers questions about why they sought out your services, why they chose your business, and what needs your services fulfilled. They may offer you insights into aspects of your services that mean a lot to your customers and maybe even aspects that can be improved.
If you do not have a lot of customers to ask or much feedback to review, start by asking different members of your team for what they notice the most about how your services truly benefit your customers beyond the original scope of the services themselves. If you can, conduct a survey sent to your target audience.
Throughout this process, it’s imperative that you and your team identify customer objections and roadblocks. When you know what your customers struggle with, you can accommodate them to the best of your ability through your services and customer service. This involves resolving those challenges for your customers. The key is to focus on how your business solves your customers’ challenges, not on the services you provide. This is the foundation of your positioning and messaging.
positioning
The basis of your messaging guidelines is determined by your positioning in the competitive landscape. This means you must be clear on who your target audience is and what their needs are. Once you know this, you must compare their needs with the benefits of your services. Then, compare those benefits with the benefits of your competitors’ benefits. This is the basis of your positioning.
At SharedTEAMS, we like to create a SWOT (strengths, weaknesses, opportunities, and threats) analysis of your top 3-4 competitors. This effort collects basic details of your top competitors, compares them with your business, and determines your competitors’ strengths and weaknesses, which helps narrow your positioning in the landscape.
By focusing on promoting what your competitors lack in your marketing efforts, you stand apart in the industry. This also helps your audience find you based on your unique positioning according to their unique needs.
When you are able to clearly define your unique benefits (not features) to your customers within the competitive landscape, you are ready to define your messaging guidelines (see Branding).
pricing
Pricing can make or break your business. If you charge too much, your audience won’t bite. If you charge too little, your audience may not perceive your offerings as valuable. To find a middle ground, we recommend implementing a low-risk package pricing model. This “try before you buy” method is very effective for subscription-based businesses because, unlike other products and services, your customers can experience the benefits of your services before they purchase them (or they can experience the benefits of your products before they purchase them at full price).
There are two ways you can offer a low-risk package pricing model: offer your complete services for free for a trial period or offer a small portion of your services for a free trial period. We recommend offering a portion of your services for the free trial period. Then, incrementally increase the services and price in a fixed, predictable way for your customers. You may want to create plans based on the different needs of your various audience segments. This way, paying customers get the full experience, but prospects getting the trial period still receive a valuable experience and are likely to want more at the end of the trial period.
For example, a single person ordering a weekly food kit may require five to 14 meals, but a family of four would require 20 or more. Bundling meals at different price points helps the business maintain subscribers while catering to their unique needs. This business may have three plan options: 10 meals, 25 meals, and 50 meals per week.
While most subscription-based businesses see success with free trials, some businesses in certain industries may see better success with discounted products or services rather than offering them for free. This is especially true for product-based subscriptions because your business cannot eat the total costs associated with product development and shipping without having the prospect pay for some of it. It’s also important to note that some customers view only paid options as valuable, so be sure to get audience feedback when you develop your pricing structure and don’t be afraid to change your pricing structure if what you start with doesn’t work as well as you hoped (and be sure to grandfather current customers into the new plan).
Yet other SaaS businesses are successful with offering “forever free” plans with limited services that are not limited by a timed trial period. The choice of how you offer a trial period (timed and free, timed and discounted, or forever free but limited) will be determined by your services, audience, industry, and competition.
The pricing strategy for subscription-based businesses is to provide value on a small scale and encourage customers to increase their engagement with your business over time. The key is to provide a frictionless customer journey by being transparent about your processes and having not only a simple trial period but also a smooth transition into being a paying customer.
Your services-based trial periods should not require your customers to provide payment details to test out your services (for free trials), as this only deters prospects from your services when they likely can find a competitor’s services with a free trial that doesn’t require payment details. (Although, discounted products obviously require payment details.) This trial period should be enough time to give your customers the experience without being too long, but the time period will depend on your services, industry, and audience. We recommend testing the length of this free trial to give your prospects time to try out your offerings as well as limiting it just enough to encourage them to purchase.
When determining the best prices for your services or products, you have two options: competitive or value-based pricing. Competitive pricing compares your services to your competitors’ services and prices them accordingly. Value-based pricing is determined solely on the value it has to your audience. We recommend value-based pricing for all consumer services businesses because your services are unique. Even if you have competitors offering similar services, you likely offer a different amount of value to your customers through your competitive differentiators.
It’s important to start off with a good pricing strategy in the marketplace because customers often complain when businesses change their prices. You don’t want to price too low and be perceived as cheap and less valuable than your competitors, but you also don’t want to price too high and alienate your ideal audience.
To develop your value-based pricing strategy, you need to do the math on how much it really costs you to offer your services (including overhead costs) and compare that to how many subscriptions you plan to sell this month and this year. You also need to research what your primary audience segments are willing to pay for your offerings.
When developing a value-based pricing strategy, we still recommend that you review your competitors’ pricing. You don’t necessarily need to be comparable because your value is different, but it is good to know where you stand in the competitive market, especially when it comes to price.
Our team works as a fluid extension of each of our member’s businesses by developing strategies and executing projects in whatever capacity is best for their unique needs.
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