How Startups Convert Customers With Subscription Pricing

Pay-as-you-go is the new normal from software to retail

The lure of subscription pricing is the guarantee of recurring revenue for your business. Once a customer flips the switch to turn on your subscription, it’s easy money:

• Easy to recognize your revenue.
• Easy to determine your margins and profits.
• Easy to enhance your product and extend that revenue out for months, even years.

While that’s true, converting a subscription customer isn’t as simple as flipping a switch. You can build a platform, launch with fanfare, offer all sorts of incentives and trials to attract potential customers — and watch as they disengage and lapse into limbo.

That’s the actual guarantee that comes with subscription pricing, and this will happen unless you cultivate a funnel that catches potential subscribers as soon as they learn about your product and follows them until their very last sign in.

I built my first subscription-model product in 1999. I’m currently in early-access on my latest, and I’ve launched a bunch more along the way.

While the customer dynamic has changed over the last 20 years, the conversion process has not. In fact, it’s actually…