What Subscription Service Providers And Subscribers Should Know
In this short piece, we will inform you about what you need to know so that you can plan your business very well as a subscription service provider who is targeting a large market size or so that you can make a good decision as a subscriber. As a subscriber, it is not good for you to default in making your monthly payment and this is not good for the service provider either. Advancement in information technology and marketing has opened doors for businesses and there is need to leverage the offers therein. As a subscription service provider, before you put a price tag on your service meant for subscription, it is very important that you know where your market is coming from so you can maximize your sales. For the subscriber, it can be fun to hold a cookie in one hand and click the mouse with the other “as you subscribe left, right and center”. But it is important that you factor in all your financial commitments before subscribing so that you don’t end up struggling to balance your financial sheet monthly or yearly.
Consider a subscription service that is priced at $10 per month. Depending on your income, as a subscriber, this may appear to be expensive or cheap. Let us do a little analysis so that you will understand what the subscription price really stands for. As an adult, you have many financial commitments to fulfill, monthly and yearly, including paid subscriptions. In the table below, we present to you typical financial commitments an adult might have. Some individuals will definitely have more financial commitments and the list will be much longer. Don’t forget to include your vacation budget. Success of this analysis starts from being able to list all your financial commitments accurately. Since we are considering a subscription service that costs $10 per month, we will assume that it is 1 unit. So for a financial commitment of payment of rent of $800, as shown in the table, the number of units involved will be 80 i.e. $800 divided by 10. In the same vein, other financial commitments are scaled into units as shown in the table.
| Item Number | Commitment | Monthly Amount ($) | Number of Units |
| 1. | Rent | 800 | 80 |
| 2. | Internet | 50 | 5 |
| 3. | Telephone | 80 | 8 |
| 4. | Auto Loan | 400 | 40 |
| 5. | Auto Insurance | 120 | 12 |
| 6. | Feeding | 300 | 30 |
| TOTAL | 1750 | 175 |
From the above table, it can be seen that this individual has 175 units of financial commitments per month, each costing $10. So the individual must be earning over $1750 after all taxes (at least $1760 per month, after all taxes) to be able to subscribe to a service that costs $10 per month. When you properly list all your monthly financial commitments and scale them into units (based on the target subscription price) as in column 4 of the above table, you will be able to know what is affordable and what is not affordable for you. It can also be seen from the table that even a subscription service that is $5 per month is not affordable for the sample subscriber whose financial commitments match the content of the table and whose monthly income after taxes is $1750. What that means is that a $3 subscription may not be as cheap as it appears and is capable of making someone start struggling with ones finances if one doesn’t sit down and do the above analysis. For subscription service provider, this type of analysis will help you know if you are actually communicating to your audience and making good use of the market or if you are looking for something in the purse of somebody who is also looking for something. To the subscriber, good luck as you add on subscription services!
Guest Writer