The reality is that most people will not sign up for the subscription even at a low price. Most people do not like subscriptions, and many do not subscribe at any price. The repeated nature of the subscription presents a great mental obstacle and makes it difficult for them to commit to.
However, you probably have a smaller set of users who get the most out of your app and are willing to subscribe. These are your most devoted and stupid users. When designing your subscription plan, you will focus on these users, they are the ones who will pay and stick (see my post on churn for why this is critical). By subscribing, you choose to focus on fewer customers, but your most dedicated customers. Given that this is a much smaller customer base, you have to charge a higher price.
- Switching to a low cost subscription can be disastrous because you scare customers away without making it up to those who stay.
- If you only offer one subscription, you will lose some customers who liked the product and were willing to pay for it through another model. Now they can do without or use a competing product.
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