As an average Joe, if I see a one-off fee of $60, it seems like a lot of money upfront and makes the decision hard and may be if I stall a but, I will forget about the whole thing by next weekend.
Compare that to $5/month, doesn’t look so bad, I spend that amount for a good coffee and donut daily… let me enter my credit-card there… eventually I forget about this in one week but am continued being charged and there are too many little charges for me to go over and figure out where my money is going.
This subscription model is a psychology hack to reduce the resistance of general people and not targeted at us, who try to be extra cautious about the value proposition over long term.
P.S. I attended some marketing fluff seminar from big honcho sales people as part of business trip, thought I’d share it about where this sudden rise of subscription model came from.
That's not typically where the software industry sets the one-time purchase though. 18-30 months is more typical. In your example that would be $5/mo for software costing between perhaps $100-150.
If it's set correctly, and the software is actually valuable enough to be worth something, there's a more balanced tradeoff between the risk of overpaying and underpaying and the benefit of the subscription acting like an inexpensive trial that will likely convert to a one-time purchase if the buyer is budget-minded.
(That said, it's certainly true that you can approach the same pricing strategies fairly or greedily; I've overheard both.)
As an average Joe, if I see a one-off fee of $60, it seems like a lot of money upfront and makes the decision hard and may be if I stall a but, I will forget about the whole thing by next weekend.
Compare that to $5/month, doesn’t look so bad, I spend that amount for a good coffee and donut daily… let me enter my credit-card there… eventually I forget about this in one week but am continued being charged and there are too many little charges for me to go over and figure out where my money is going.
This subscription model is a psychology hack to reduce the resistance of general people and not targeted at us, who try to be extra cautious about the value proposition over long term.
P.S. I attended some marketing fluff seminar from big honcho sales people as part of business trip, thought I’d share it about where this sudden rise of subscription model came from.