Hi. Thanks for joining us today. I'm Lach Truong, senior director of product marketing at Brickherley. Today, my colleague, Eric Holley, senior product manager, and I will showcase a new pricing model called Ramp Pricing, which is all the buzz within subscriptions, mainly because it helps you acquire new customers, retain existing customers, and build more loyalty around your brand.
Let's dive in.
So why did we decide to add another pricing model to our already extensive list? Because of the stat here. Based on a recent McKinsey study, pricing was the most important reason for a new subscription sign up, and it was also fifty percent more than the next reason.
Not surprisingly, price is the most important reason subscribers choose to cancel as well. And this stat was from our recent twenty twenty two Endemic Impacts and Trends Study.
The good news is, Recurly offers one of the widest pricing models available to give merchants numerous options to test offers and cater to their diverse customer preferences.
Now we're gonna walk through this, but fair warning, I'm gonna go through these fairly quickly. But if you're interested in learning more about these pricing models, please visit our documentation at docs. Recurly dot com.
First, you've got fixed or fixed recurring, which is the most common subscription model. It charges a set amount upfront on a recurring basis.
The next three, we'll discuss is what's considered quantity based.
The first one is TIER.
Tier charges for each unit based on the price of its corresponding tier.
Then you've got volume, and volume essentially charges all units based on the price of the highest tier reach.
And then the last quantity based pricing model is stair step. Stair step charges a fixed price based on the highest tier reach.
And hopefully, these examples are helpful to understand how each of these pricing models work.
The other pricing model is what's called usage based, which is also referred to as metered or consumption based. It charges a variable amount determined by usage measured over the billing cycle, typically in arrears.
And lastly, of course, you've got one time pricing. And as the name indicates, this is a one time charge that's nonrecurring, such as a setup fee or to buy equipment.
And this now leads us to why we're here today.
You can now add ramp pricing to your plans and subscriptions. What is ramp pricing?
Essentially, it allows you to create plans and or subscriptions that can dynamically increase or decrease based on defined billing periods.
So for example, let's say you're looking to acquire more customers.
You can set a lower entry point, for example, four ninety nine a month for the first six months. And after month seven, it'll increase back to nine ninety nine, the regular price.
Or if you're looking to reward your customers and subscribers for their tenure and loyalty, you can set the price to go down. Meaning that for the first year, it'll be a hundred ninety nine. And after the second year, it can decrease to a hundred forty nine a year, rewarding your subscribers and making sure that they stay longer with you.
Let's now talk about some of the features and benefits.
Real quickly, to summarize.
One, it's really easy to set up, modify, and manage. Within the plan creation steps that Eric's gonna walk you through, you can customize the different billing periods up to twelve different intervals, day, weeks, months, years, and it's really intuitive.
Two, you can configure or tailor your own communications to notify your subscriber if the price is going up or down in well advance.
Lastly, you'll be able to measure the plans with ramp pricing to understand its effectiveness to decide whether you wanna convert all of your plans to ramp. And there's plenty more. Now I'm gonna hand it over to Eric, who's gonna dive a little deeper into what ramp pricing is, some of the features capabilities, and also a release link demo.
Thank you for that intro, Luck.
Hi, everyone. My name is Eric Hollie. I'm a senior product manager here at Recurly. To dive into the details, Recurly offers rate pricing, and rate pricing offers flexible configuration for you to set up a series of step up or step down pricing on your plans and subscriptions.
You'll have to create new plans that include grant pricing, and these could apply to those new subscription sign ups to that plan.
The price change is set at a specific dollar amount. If you wanna calculate percentage, you can set that as a specific dollar amount as well.
Subscriptions can use the default pricing from the plan or set unique pricing on each subscription.
Plans can have up to twelve different ramp intervals configured.
Ramp pricing is supported with free trials and pauses where the pricing schedule continues coming out of a trial or in and out of a pause.
You're able to configure ramp pricing schedule using all the different currencies that are enabled on your sites. There's also a new email template to communicate with your customers of upcoming price changes. We understand that there may be mandated regulations around customer communication from different card brands or from different regions.
We've also enabled reporting within Recurly through our analytics and our exports so that you can measure and analyze your play performance.
And understand that if there's a certain ramp interval where the price increases or changes that is causing churn so you can make adjustments to your prices and reduce that churn.
Let's get into a few of the details. As we mentioned, ramp pricing could be a step up or a step down. And in the use case of step up pricing, the goal is to acquire more customers. This is a great tactic for merchants in the target verticals of digital streaming, digital publishing, elearning, and b to b SaaS. The example of an introductory price offer where a customer signs up at two ninety nine for three billing cycles, where after three billing cycle, the price ramps up to five ninety nine for nine billing cycles, then to the regular price of nine ninety nine for the duration of that subscription.
In the b two b world, having step up pricing will allow you to generate more revenue.
You can set contracts where the price increases five percent after year one and eight percent after year two. In either scenario, you're able to configure this right pricing schedule in Recurly, and Recurly will take care of the rest. You don't need to come back in and manage the pricing schedule, the pricing changes.
Recurrently automates all of that for you.
Another use case is offering step down pricing in order to retain more customers. This is great for merchants in that vertical of e learning or b to b SaaS. An example is where a new customer comes in at an intro price for twenty four ninety nine for the first year and renews at a lower price at nineteen ninety nine for the following year, And the renewal rates continue to drop, rewarding those loyal customers by decreasing three dollars every year to the baseline price of nine ninety nine.
In the b to b side of things, step down pricing allows you to convert more deals where a contracted amount can increase five percent after year one, but then decrease three percent in year two. Again, this is all automated within Recurly.
In order to use rate pricing, you must be on a Recurly pro or elite plan. So if you are on a core plan, you'll need to upgrade to a pro or elite plan in order to take advantage of this functionality.
You must have only bill what changed and credit memos enabled on your site. And ramp pricing is supported via API v two, v three, the Recurly app admin UI, on our hosted pages, and via a new email template.
Let's get into a live demo and look at specific configuration of how to set up those plans.
So let's create a new plan with let's do step up pricing first and create that scenario that we were looking at earlier. So I'll create a monthly plan, and I'm going to select ramp pricing as my billing model, and I'm gonna add two more ramps. And the first ramp interval is three ninety nine for three billing cycles. The next ramp interval is nine ninety nine for nine billing cycles, the final price of nineteen ninety nine for the duration of this subscription.
And you can see that is reflected here in the plan summary, giving you an at a glance view of the plan configuration that you're setting up. Rent price change email is also configured and enabled on this plan, and I'm gonna go ahead and create that plan.
Now I can go to an account and add that subscription.
Here it is. Step up pricing. And you can see on this subscription, that billing configuration is already set up on the subscription. But if I wanna change that, I could say the second price is going to be lower because this customer was coming in through a certain marketing promotion as an example. And so this subscription, while it's at the same plan, is going to have a unique pricing schedule.
And then I'll go ahead and add that subscription.
And as you can see, this account now has a billing period that's in progress at that price of nine ninety nine. We've got a couple more billing periods at that intro price, and then the price will automatically step up through the pricing schedule that's set on the subscription.
Let's create another new plan with that step down pricing. And this is going to be three year term, and I'm gonna go ahead and set the pricing where the pricing is five hundred dollars for the first billing cycle.
And then the price steps up to seven hundred dollars for year two and then steps down to three hundred fifty dollars in year three.
Go ahead and create this plan.
And again, I can go ahead and create a subscription to this plan, and I could also, again, modify this subscription where the price schedule continually decreases year over year and sign a subscriber up to the subscription.
And, again, Recurly will take care of these prices changes on your behalf, making it easy, streamlined, and simplified for you to operate your business.
As mentioned, there is also a new exports where you can export ramp pricing, the ramp pricing schedule, and understand where your customers are at in their pricing schedule and then also understand where customers are leaving and make upstream pricing adjustments.
With that, I'm gonna hand it back to Locke. Obviously, please reach out with any questions. The Recurly product team always loves to hear from customers.
Thanks, Eric, for the ramp pricing details and demo. That was incredibly easy to set up, modify, and manage the plans. We hope you guys are really excited about this new pricing feature. And thank you again for viewing this video. If you're interested in learning more about Recurly and our products and features, please check out the other videos or visit us at recurly dot com. Thanks, and hope to see you again soon.
