Subscription Business Models: Quick Repackaging Tips

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Software pricing and packaging are often viewed as long-term tools. So, in times when your subscription business model needs action now — what do you do?

Many software companies believe their only option is to counter with deeper discounts, and extras like free products or services. While these tactics can help close deals, these quick wins may be setting precedents that will be hard to overturn down the road.

To stimulate slow sales without the baggage of long-term liabilities, here’s a thought: Give your sales team the freedom to negotiate packaging options, just like they have the freedom to negotiate discounts.

Giving Salespeople Subscription Business Model Freedom

Far-fetched? We think not. Here’s what we suggest…
Give your sales team the freedom to negotiate packaging options
Downsize or “de-feature” existing products to create new, no-frills packages. Unbundle a larger product into several smaller packages. Limit, or eliminate, high-value services, and pare down what’s inside your products, disabling (but not hiding) more-advanced features.

Whichever of these you choose, the key is to downsize in a way that allows you to rapidly bring these lower-value, lower-priced products to market. There is no need to create new packages that require new product development.

  • Get these no-frill packages into the hands of your sales team immediately. Don’t wait for launch plans, new price lists, etc., take your plans straight to your sales force now. Give them the guidance they need to start selling these new offerings immediately. Let them know what options they can trade for price, and give them the go-ahead to start selling.
  • Use time limits and short-term contracts to control these deals. Position them as short-term promotional packages that won’t necessarily be around downstream. This positioning should also be a part of any deep discounts or free product offers.
  • Don’t get locked into long-term contracts that guarantee price protection. Instead use short-term contracts that give you the freedom to raise prices and promotional offers to coax prospects off the fence.
About the Author

Jim Geisman

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Jim is cofounder of Software Pricing Partners. An original member of the IMP team (ARPAnet project), Jim has helped emerging, growth and enterprise software companies solve some of their toughest pricing problems.

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