In this week’s edition of Let’s Talk, we’re diving into one of the trickiest challenges for subscription-based businesses: pricing. How do you set a price that keeps your customers happy and your profits growing?
We’ll explore effective strategies for pricing your subscription service, making sure you hit the sweet spot between value and affordability. Whether you’re launching a new service or refining an existing one, these tips will help you get it just right. Let’s get started!
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Paul Koopmans, Vice President Commercial Australia / New Zealand, Worldpay
“An effective subscription pricing strategy isn’t just about boosting revenue—it’s about nurturing long-term relationships. At the end of the day, consumers subscribe to services to unlock premium features, but any type of friction, such as failed payments or renewals, can negatively impact the customer experience and lead to churn.
“According to Worldpay’s Payment Performance Report, when asked about the main reason for retaining their subscription, 94% of consumers mentioned having a seamless experience and user interfaces, as well as the flexibility to pause or edit subscriptions. 91% of consumers prefer ad-free experiences, with almost half (43%) willing to pay more for an ad-free option.
“Offering a free trial or discounted introductory period is also another way to open opportunities to new customers and allow customers to experience the value before any kind of long-term commitment. While only 1 in 5 (23%) cancel their subscription after the initial trial, other consumers express interest in extending their service.
“While pricing a subscription model correctly is important, ultimately, it’s about the value you bring to your customers. The best subscription models don’t lock customers in; they create experiences that make them want to stay.”
Mark Drasutis, Head of Value, APJ at Amplitude
“There is a slew of considerations that go into pricing strategies, but the key consideration boils down to how customers perceive or experience product value. This starts with data-driven insights on how customers are engaging with your product.
“Analytics platforms can help teams identify which product feature is used with high frequency, which could inform which features to include at which pricing level. Some tools even incorporate predictive analytics, which can help anticipate customer behaviour in response to price changes.
“There’s no one-size-fits-all solution for pricing, but I always recommend having a free option. It’s a great, low-barrier way to get people to experience the value of your product. It is up to you to make the experience so valuable that they’re willing to pay for it over time. You can’t have product-led growth if you don’t have time for some type of free offering to start.”
Craig Stockdale, Managing Director, ANZ at Wasabi Technologies
“Pricing a subscription service effectively is about balancing value for the customer with sustainability for the business. Customers don’t want to feel trapped by hidden fees or unpredictable costs, so transparency is fundamental for all key stakeholders. A simple, predictable pricing model builds trust and can encourage long term relationships. For cloud storage providers, this means avoiding complex tiered pricing structures that penalise growth.
“One of the biggest challenges businesses face in our industry is egress fees, which are unexpected charges for accessing their own data. Transparency over these costs in the subscription phase not only benefits customers, but also simplifies financial planning for businesses, making budgeting more predictable. This is why we currently offer a low-cost, high-performance model which ensures that businesses can scale without facing exponential price increases.
“Successful subscription models focus on clarity, fairness, and ensuring that customers only pay for what they need, without surprises. After all, the best approach is one that aligns the business’s success with that of its customers.” With data volumes growing at unprecedented levels, predictability is the key.”
Anthony Spiteri, Regional CTO APJ, Veeam
“Transparency is key when pricing a subscription service. Customers need to know exactly what they are paying for, which means no hidden fees or unexpected charges. If pricing feels unpredictable, businesses risk losing trust and, ultimately, customers.
“The best approach is to offer clear, predictable pricing models that align with customer needs. For example, Veeam Data Cloud Vault is one of Veeam’s as-a-service offerings, launched in response to the growing demand for managed solutions. It delivers enterprise-grade backup storage with straightforward per-TB pricing. It not only covers the storage itself but also includes necessary read/write requests and egress fees, eliminating unexpected add-on costs.
“Additionally, offering multiple options, as Veeam does with its Foundation and Advanced editions, enables customers to scale their storage as needs grow without sudden price jumps. A fully managed Storage-as-a-Service solution also means customers avoid the cost of time investment in infrastructure management.
“When customers can confidently forecast their costs, they are far more likely to invest in and stick with a service. Transparent, flexible pricing isn’t just a strategy for subscription services, it’s a necessity in today’s competitive market.”
Ben Lipschitz, CEO and Co-Founder, FoodByUs
“Pricing a subscription service is all about balance. Keep it attractive enough to hook customers while ensuring you’re making a sustainable profit. A free entry point is key. Whether it’s a scaled-down version or a time limited free trial, giving customers a risk free way to experience your product builds trust and reduces hesitation. This is how we started out at FoodByUs.
“The next phase is looking at how you structure your pricing around what customers really value. Instead of a flat monthly fee, consider charging based on usage, whether that’s number of pages, calls, users, or another core function. This aligns cost with perceived value, making it easier for customers to justify.
“Larger users should pay more, even if the features they need weren’t the hardest to develop because they can, and they should. Also, offer flexible plans: short-term, higher-cost options for those who want flexibility and long-term, lower-cost options for committed customers. Finally, use case studies to back up your pricing and prove ROI.”
Matt Jones, Chief Revenue Officer at Prvidr
“Most of us love a discount, a deal or having something thrown in for free. Subscription businesses need to be laser focused on making their offerings as compelling as possible, providing superlative service and engaging with customers regularly and in relevant ways at the right price point. For some businesses, running daily deals may be the best way to engage. Others will do better choosing a couple of key moments in the month – shortly before and after the monthly payment date, for example – to reach out to customers with tips, advice or a tailored promotional offer.
“However, brands should always demonstrate the relativity of value to price and package in pricing based on customer loyalty and tenure. Subscription businesses are about building and monetising recurring customer relationships, not about building and shipping units for discrete one-time transactions. The health of a subscription business is evaluated based on what it is likely to make this year and in the coming years, not on what it has shipped, earned and spent in a past period. Subscription companies therefore need to reframe their internal metrics and price their product based on recurring revenue and recurring expenses and should therefore care about recurring profit.”
Kate Crocker, Dark Patterns & AI Consultant, Legal Copywriter
“When considering pricing for a subscription service, also think about cancellation. Subscription traps are significant hurdles for potential customers, so being upfront about unsubscribing is a smart business move.
“Subscription traps are dark patterns, which are tricks and traps designed to manipulate a person to do something they hadn’t intended.
“Subscription traps can arise when:
- Unsubscribe settings are hidden, obscured or difficult to navigate.
- The number of steps to unsubscribe is greater than those required to subscribe.
- Unsubscribing requires the customer to use a different method from subscribing (for example, subscribing via a website but unsubscribing via a phone call to customer service).
- Confirmshaming is used to discourage unsubscribing (for example, “If you don’t like money, unsubscribe here”).
- The customer’s credit card is charged at the end of a free trial period without any further notice.
“Australian consumer legislation may soon include laws against “unfair trading practices,” so it’s a good idea to start thinking about these issues.
“Still not convinced? One recent Australian study found that 90% of survey participants would purchase from the same organisation if subscription cancellation was quick and simple. That’s compelling, and it’s a great marketing opportunity for your business.”
Nick Boucher, Founder and CEO at Karmo
“Pricing a subscription service comes down to striking the right balance between value, trust, and long-term sustainability. The first step is to ensure there is real demand for your product. Pricing becomes much easier when customers genuinely need what you are offering. A product that fits the subscription model naturally finds its market.
“From there, value-based pricing is key. Offer clear, tiered options that highlight the benefits of each level so customers can see what they are paying for. If your service solves a meaningful problem, customers will be willing to pay for it. Transparency is essential, with no hidden fees or surprises. A clear and upfront pricing structure builds long-term trust.
“Competitive awareness is important, but don’t obsess over matching others. Understand what competitors charge, but focus on the unique value you bring to the table and price accordingly. Sustainable pricing is crucial, as it must cover costs, allow for profitability, and align with customer acquisition cost (CAC) and lifetime value (CLTV).
“Finally, consistency matters just as much as price. If you cannot maintain a steady supply of your service, customers will leave regardless of how competitive your pricing is. A strong pricing strategy is not just about numbers. It is about delivering real value consistently and transparently.”
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Struggling to price your subscription service? In this week’s Let’s Talk, we’re showing you how to hit that sweet spot—no more guesswork! Featured, Let’s Talk, Pricing Dynamic Business