Recurring revenue from subscriptions comes when you set an effective pricing strategy, design an attractive subscription — and then make the payment process utterly seamless. To find out how Ancestry.com does it, catch up with our latest VB Live event.

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Getting the subscription model right has a lot to do with the psychology of choice, it turns out.

Too many subscription options, the potential customer gets overwhelmed and walks. Too few, and your customer feels crowded into their decision.

Finding that sweet spot, the subscription option that makes your user feel like they’re wringing out all the value and your accountant feel like Scrooge in his money vault, that’s the key to bottom line results, says Derek Blatter, Senior Manager, electronic payments and fraud prevention at Ancestry.com, though not quite in those words.

“We want to ensure we’re getting the customer to select the product that makes sense for them and that makes sense for the business,” Blatter explains. “It’s important to understand how that’s going to impact the way that customers convert — and how the customer value or the lifetime value will change based on the various options that they select.”

The option a customer chooses is also important from the conversion standpoint, says Kevin Hennessy, director of digital content at Worldpay.

“There’s a really big decision to be made by businesses about what payment methods to offer based on that transaction value,” he explains. “Certainly, the cost of doing business can vary depending on the transaction amount.”

If the payment method is going to charge ten percent for a seven dollar transaction, it’s not nearly as impactful than if you’re driving somebody toward a 200 dollar purchase for a ten percent cost of the transaction.

“Make sure that the payment methods afterwards are going to match your cost appetite for the conversion of that customer,” Hennessy says. “You also need to consider the preferred payment method is in every country for every consumer, but also make sure your payment method doesn’t cut into your profits too much — it’s a really big decision.”

So how do you nudge the customer in the right direction? It starts with how you set up your options landing page. There are two key page elements to pay attention to: How you provide the default option to the customer, and how price is highlighted — for instance, the additional savings they’ll get if they choose a long-term commitment versus just a one-month subscription.

A lot of it comes down to how well-informed the customer feels.

“Just distilling all the subscription information into a simple way to understand is key,” Hennessy says, pointing out the matrix of options on Ancestry’s selection page. “Get a lot of information out to the customer in a way they can navigate and get working and integrating with your product as soon as possible.”

But all is not lost if they don’t choose the most lucrative option, he says.

“You don’t have to make this the only point where the choice is made,” explains Blatter. “Find ways within your product where you can naturally integrate this question of adjusting the level of service. If the customer initially opts for a lower tier product or access level, does it make sense to prompt them for a potential upgrade or a change in their level of access as they’re engaging with the product?”

Designing all your customers’ choices is not a one-and-done either.

“This is not a single point where we have designed the page and moved on; it’s constant,” Blatter says. “We have our ideas, we have our theories about what will work, and we try it out. Sometimes we’re completely off. We’re wrong. Other times we’re pretty spot on. It takes a constant effort of A/B testing in order to ensure we’re presenting the customer with the right options — we’re learning from that and evolving over time.

“It’s so important to do A/B testing,” agrees Hennessy. “Everyone’s demographic users are going to be a little bit different–different words, different fonts are going to resonate with all different types of people selling things on the internet. It’s so important to test and make sure you have partners that can help you do so correctly.”

And then you need to be transparent at checkout, to ensure they don’t abandon the cart right at the crisis point.

“It’s transparency about what you’re going to get access to,” Hennessy says, explaining that once a user chooses a subscription level, “make sure that on the next page, they know how much they’re going to pay, and that the currency and the language is very tailored for what you’re selling, and that it resonates with the people you’re trying to entice to buy your product.”

For more on how to cut involuntary churn off at the knees, scale globally and more, don’t miss this VB Live event.


Don’t miss out!

Access this VB Live event on demand right here.


In this VB Live event, you’ll learn how to:

  • Provide subscribers with the right payment options at the right time
  • Get users to pick the subscription option you WANT them to
  • Increase payment conversion with an effective pricing strategy
  • Create and execute a payments strategy that enables you to reliably scale globally

Speakers:

  • Stewart Rogers, Director of Marketing Technology, VentureBeat
  • Derek Blatter, Senior Manager, electronic payments and fraud prevention, Ancestry.com
  • Kevin Hennessy, Director, Digital Content, Worldpay
  • Wendy Schuchart, Moderator, VentureBeat

This VB Live event is sponsored by Worldpay.