Just curious to know if anyone has seen any of the outcomes of this method.
Found that the extremity of pricing between Yearly and Monthly subscriptions for SAAS offerings has grown in the last 6 months. Some services will do something like $18/mo @ yearly renewal or $32/mo @ monthly renewal.
Maybe more of a consumer habits discussion. I’ve had a gut feeling lately telling me that I’m not getting a discount for billing yearly, I’m getting a tax for billing monthly as a consumer.
I understand there isn’t a great real difference between the two, but curious to know if there’s any research on what the line is on pricing when it comes to perception from consumers.
We did an analysis of this a couple of years ago. At that time, we found that from the business side, monthly SaaS contracts need to incorporate a premium greater than 22% to achieve the same economics as an annual SaaS contract, after factoring for churn, etc.
https://burklandassociates.com/2021/09/28/monthly-saas-contracts-vs-annual/