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3 Ways to use Annual Pricing to your advantage

These emails got me excited to pay more

In a recent dispatch of Tiny Improvements, we talked about the Decoy Effect, and why it makes sense to offer 3 price tiers for your product. It's a great way to show your customers the benefits of paying a bit more for your product, and it's a great way to increase your revenue.

Once you've proven to a customer that your product is worth paying for, it should be your goal to retain that customer, showing them that your product is worth paying for again. It's an important inflection point for your relationship with a customer - in a sense, you're switching from persuasion to care and compassion.

Your best customers will be the ones who can feel the love - the ones who both value your product and feel valued by you. This is why I want to talk about annual pricing, and how you can use it to your advantage to build loyalty with your customers.

1. Offer a discount

The most obvious way to use annual pricing to your advantage is to offer a discount. This is a great way to show your customers that you value their business, and it's a great way to increase your revenue.

The discount you offer is up to you, and it really doesn't need to be much. I've seen discounts as low as 5% and as high as 20%. The important thing is that customers see a benefit for switching, and that you're making it clear that by committing to a longer billing cycle, your customer is saving money.

2. Remind monthly customers that you can save them money

If you're offering annual pricing, you should be reminding your monthly customers that they can save money by switching to annual billing. Consider doing this a month or two after they've signed up for your product, particularly if you're able to tell that they have been using the product regularly.

If that doesn't work, send another reminder around a year after they've signed up. This is a great way to show your customers that you value their business, and it's a great way to increase your revenue.

Here's an example of an email I received from Riverside FM a few months after I signed up for their product:

Screenshot of an annual plan upsell email from Riverside FM
A personalized touch and a thoughtful email got me to switch to annual billing.

3. Give advance notice of upcoming charges

Once a customers has switched to annual pricing, it can be easy for them to forget that they're paying for your product. For this reason, it can be a good idea to send them an email a month or two before their annual billing cycle is set to renew. This will help ease the sting of the charge, and it will give them a chance to cancel if they're no longer using your product.

This is also a great time to remind customers of the value they're getting from your product. If you've got the analytics in place, consider including some stats about how they've used your product over the past year.

You might also want to include a link to your public release notes, or a short list of new features that you've added over the past year. This is a great way to show your customers that their money is helping to build a better product.

Screenshot of an annual reminder email from Fathom Analytics
Fathom's annual billing email is well-written, consistent with their brand, and written to make the customer feel appreciated. That's good stuff.

It's no secret that I love Fathom Analytics - their product is delightful, and their messaging is always on point. This email is a great example of how to use annual billing to build loyalty with your customers.

Tiny Improvements reader launches

I've been really happy to hear from lots of Tiny Improvements readers who have shared what they've been working on. If you've got a project that you'd like to see featured here, send me an email and tell me about it!

  • Andris launched a site to market their interior design rendering service, Ayarender. It looks like a great offering, and a good way to give potential buyers confidence in what they're getting.

Congrats on the launch!

Stuck in my brain this week

  • ๐Ÿงช Over at APIs You Won't Hate, we released a writeup comparing OpenAPI Bundling Tools. There's a lot of options, each with their pros and cons. Give it a look.
  • ๐Ÿงฎ My good friend and polyglot dev Josh Finnie recently put up a tutorial about Creating a vCard QR Code in Python. Generating a code is one thing, but the cherry on top is adding a little branded flair.
  • ๐Ÿ“ฑ I've been digging into react-native for mobile app development, and found a great tutorial from YouTuber Simon Grimm on File-based routing in react-native.

Thanks for reading Tiny Improvements. If you found this helpful, I'd love it if you shared this with a friend. It helps me out a great deal.

Until next time - be excellent to each other!

3 Ways to use Annual Pricing to your advantage

Annual pricing is a great way to increase your revenue and decrease your churn. Here are 3 ways to use annual pricing to your advantage.



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