How much to charge, and how to bundle magazine subscription offers online
There’s very little consistency when it comes to pricing magazines on the internet, and even less when it comes to bundling magazine subscription offers. We’re all familiar with the $12 print subscription, offering a printed piece of art, signed sealed and delivered for $1 per month. Some may say that pricing scheme is devaluing magazines across the board, but boy does it work.
So how far have we come since the $12/year print offer? In some cases, not very far. But in others, you’ll find niche consumer magazines bringing in $30 or more per subscription.
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First let’s talk about numbers.
Did you know the last number in your magazine pricing model might depend on the sex of your target audience?
Marlene Jensen, author of several books on pricing strategy, including Setting Profitable Prices, has indicated in her research that if you test supermarket pricing (meaning using cents instead of rounding off), women will buy more. On the other end of the spectrum, men like to have things rounded.
Since women out-buy men five to one, most publishers use supermarket pricing, but if we had an all-male audience, like Men’s Health we might round things off.
Furthermore, some people are more willing to spend 99.97 on a product than $100, even though it’s only three cents more. In Western society, seven is a lucky number, but it also looks like a lot less than a full number to the naked eye.
But why 7?
Marlene ran a big battery of tests with multiple clients when she was getting her Ph.D. in economic behaviorism, and pricing was her thing. She tested questions like, What if it ends in zero? and What if it ends in one? She tested if it ended in 19.99, $19.98, $19.97, $19.95, all the way down to $19.90.
And if I remember correctly, $19.97 generated a 15% higher response than the loser, which I believe was $19.93. So you can actually move the response rate tremendously by changing that last digit.
Now let’s talk about bundling magazine subscription offers.
Many publishers offer bundles of products, and we’re strong believers in it. Test after test shows these deals sell more products, and in high enough volume to generate greater revenues than selling fewer items at higher individual prices.
Decoy pricing for magazine subscription offers is the bundle on steroids, and it’s something that we’ve written about before, with help from Professor Dan Ariely at Duke University. Ariely has shown how you can create a perception of increased value by setting up the right contrast.
Here’s how it works. A traditional bundle might look like this: Magazine subscription $20, subscription website $30, bundle of both $45. That $45 price looks like a good deal because it’s $5 less than the regular combined price, right?
Wrong. Our research shows that this pricing drives 70% of buyers to the cheapest price, the magazine only. Only 20% will opt for the bundle, with 10% settling for the middle price.
Instead, Mequoda best practice leverages Ariely’s contrast effect: We set the prices at $20, $30 and $35. Now that highest price seems incredibly valuable because it’s just $5 more than the middle price, and $15 less than the normal combined prices.
In this pricing scenario, we find that it is more like 70% picking the highest price instead of the lowest price, the middle gets the same 10% and only 20% choose the lowest price. What’s more, this pricing usually drives more orders.
Of course, following the rule of sevens, we recommend a tier that goes more like:
- $19.97 for the print magazine
- $29.97 for the digital edition including web and archive access
- $34.97 for both
What else to consider with magazine subscription offers
Some publishers choose to price the print edition and the digital edition the same. And that can work quite well, too. Certainly test yourself. One argument to that method comes from a study at Yale that showed that if two similar items are priced exactly the same, consumers are much less likely to buy something than if the prices are even slightly different.
In one experiment, users were offered two different packs of gum. When the packs were priced identically, only 46 percent decided to buy gum. But another group of users was offered packs for either 62 cents or 64 cents – and more than 77 percent of the consumers decided to buy.
If you have more than one magazine subscription editions, consider pricing them slightly different, even if you feel they are valued at the same amount, or they cost you the same in time and resources, and are the same length.
Do you need help repackaging and modernizing your existing magazine? Reach out and talk with us. See how we can help you grow your audience, revenue and profits.