Today most service “packages” are offered as monthly subscriptions. This is the case with our own social media management pricing packages for example.
Writers for the service industry and trade magazines, even businesses themselves, usually talk in terms of subscriptions, rather than packages. Stats and polls agree, the subscriptions market is growing.
Subscription vendors grow by 30% – 50% annually
Source: The Paypers
70% of business leaders say that subscriptions are key in the years ahead
Source: Global Banking and Finance Review
Subscription businesses, on average, are growing revenues 5X faster
Source: MultiChannel Merchant
there’s a disconnect between businesses & customers in using the term subscriptions
We have noticed there’s a disconnect between businesses and customers in using the term subscriptions. In spite of all the growth in subscriptions, customers rarely use that word.
Customers are 20x — 30x more likely to use and search for the word packages, rather than subscriptions. For customers, if it’s monthly, it’s a “monthly package” rather than a subscription.
Why it’s better to offer bundled services, like our social media packages.
A big advantage of packages is they quickly clarify the services offered, how they might be combined and what they cost. Traditionally, without packages, it is a lot more difficult for customers to figure out these basic points.
Many companies like to list all the services they offer, but this can make it confusing for customers to know how those services fit together. Packages also force companies to be more up-front about their pricing.
As a customer, getting price quotes in most service industries can be torture.
Think about it, to get a quote on services, whether it’s SaaS, marketing or something else, it usually requires multiple calls and time.
The usual story is to first contact the company by completing a form. Then, have a phone call from someone who asks questions but cannot help. Then, schedule to speak with someone else, sometimes days later. The second-person you speak to often asks the same questions as the first and may decide what services to combine.
Then you wait for a quote. Sometimes what you receive isn’t really a quote, because it gives a cost-range or mentions you need to call, again, to find out about discounting. Three or more calls over days or weeks is common.
Ugh! We’ve been there. No wonder, most prefer to see packages with pricing up-front.
We’ve also found that companies that do offer packages, like ours, often provide custom quotes a lot faster and easier.
Packages can lead to a better focus on value.
It has been reported that the majority of businesses spend only about 10-hours a year thinking about their pricing. When companies, that have never offered packages before, do start working on putting some together, they often see their prices in a different light. That can cause them to think harder about their pricing and a value.
Plans, like our social media management pricing packages, can add efficiency.
When a service business has many customers receiving the same or similar service packages, it can make it a lot more efficient to provide those services. Thinking about the workflow can also help guide business decisions on what services to offer as packages.
Most restaurants offer their menu items as packages. The dinners, for example, usually include a couple of sides. Many restaurants even frown on substitutions, especially when they are busy, because it makes he kitchen workflow harder.
One way packages sometimes get a price bump is with add-ons. Contrast the above example with high-end steakhouses, where sides are almost always ordered al la carte, resulting in a bigger bill. However, businesses should be careful with too many add-ons because it can diminish the up-front aspect that made their package attractive in the first place.
Some services are easier to package than others.
If you find this to be the case for your business, you may consider offering packages for the services you can.
At In Web Media we offer social media management pricing packages. In addition, we provide more customized services, like SEO, as add-ons or as a stand-alone service.