Q. How will you go about designing a subscription based model?

Question

Accepted Answer

To design a subscription based model, I would follow a systematic approach involving market research, pricing strategy, value proposition, and customer segmentation.

Conduct market research to identify target audience and their needs
Determine pricing strategy based on market analysis and competitor benchmarking
Define the value proposition of the subscription model, highlighting benefits and unique features
Segment customers based on their preferences, usage patterns, and willingness to pay
Design a user-friendly subscription interface and payment system
Implement customer retention strategies like personalized offers, loyalty programs, and regular communication
Continuously analyze and optimize the subscription model based on customer feedback and market trends

Accepted Answer

As subscription model will be attractive to regular paid users with spends on the higher side, I will start with them. Let us take the numbers for the top 30% of the paid users. If the bat costs on avg. $2 and avg. number of bats per month is 5. We have 30% of paid users spending $10 per month on average. Now, when we offer a subscription model, we take away the flexibility of buying only when its needed and at the same time we ask a higher amount to be paid upfront. Hence, we know there needs to be sufficient discount. But the problem is that we don't know how much discount will give us best results. I will start with access to 5 bats per month at a price of $8. This will not be final and will be shown as today's offer is 20% discount on month's subscription. This allows me to keep $10 as original price on the screen and also keep testing the price at which it is being sold. I can now change the discount per day or user to identify the price that gives me maximum output.

Q. How will you go about designing a subscription based model?

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