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Estd 4.22.2023
Based on the principles outlined in our pricing strategy book Price to Scale, it’s generally most effective to break down annual pricing into an equivalent monthly cost (e.g., “$100/month, billed annually”). Here’s why and how you can apply this approach:
• Directly digestible cost:
Presenting the monthly equivalent helps potential customers more easily grasp the ongoing commitment. Instead of seeing a large lump sum (for example, $1,200/year), customers perceive a smaller, familiar monthly fee.
• Psychological impact:
As detailed in our book, making the cost feel less daunting is key. By communicating the price as “$100/month, billed annually,” you minimize the shock of a high upfront annual payment while still clarifying the overall commitment.
• Transparency and clarity:
Always ensure you include “billed annually” so there’s no ambiguity about payment structure. This strikes the right balance between digestibility and transparency—a major theme in Price to Scale when designing effective pricing pages.
In summary, breaking down the annual price into a monthly equivalent on your website not only makes the cost more approachable for customers but also aligns with the strategic guidance provided in our book Price to Scale.