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Welcome to Chapter 5 in our 9-part Subscription Guide. (If you missed it, our previous chapter was Chapter 4: 23 Ideas for Bonus Content to Offer Your Podcast Subscribers.)
Once you’ve decided what you’ll offer your podcast subscribers in the way of perks and bonus content, pricing your plans comes next.
This is an important step, so you’ll want to spend some time and thought on it. Setting a price for your podcast subscription plans is one of the most impactful decisions you’ll make in your podcast business.
- A good price that matches your audience to the value you deliver will help you convert more free listeners and build a sustainable income.
- A poorly chosen price can stall your program, making it hard to gain subscribers and leaving you feeling frustrated and burned out.
So what is a “good” price?
In this article, we walk you through the subscription pricing strategies that will help you answer that question for your podcast.
Understanding the value listeners get from your podcast
Before you can begin to think about how to price your podcast subscription, you first need to think about how much and what kind of value your listeners get from your show. Thinking in this way is a common pricing strategy called value-based pricing.
In value-based pricing, there are three value drivers, that is, three main ways that people can derive benefit from what you offer: economic, emotional, and community.
1. Economic value
If your podcast helps listeners make money, save money, or reduce risk, you deliver economic value.
2. Emotional value
The emotional value driver is about how your podcast makes listeners feel. In this category of benefits, Maslow’s Hierarchy of Needs plays a prominent role. Delivering value at the higher levels of Maslow’s pyramid, such as esteem and self-actualization, means you can command higher prices.
Steven Forth with examples of emotional value selling:
3. Community value
Community value is value that neither the buyer nor the seller get, but that accrues to a third party. For example, working to fight climate change is a community value.
Subscription pricing expert Steven Forth sees community value drivers becoming increasingly important to people over the next couple of decades.
After reading through this list of value drivers, you probably already have some good ideas about the benefits your podcast delivers. But how do you really know for sure?
“Spend lots of time talking to your audience and listening to what they have to say and not trying to prejudge the issue,” says Forth.
He recommends reaching out to a handful of your listeners to do one-on-one interviews. Then, take your findings from the interviews and turn them into survey questions so you can go out and validate them with your broader audience.
At this point, you may see your audience falling into segments or clusters, where one segment gets a certain value from you and another segment gets a different value. Or, you may find your audience is pretty consistent in the benefits they derive from listening to your show.
How many subscription tiers should you offer?
Forth’s advice is very clear on this question: If your audience is consistent in how they get value from you, offer one plan. If your audience falls into segments, you can create different tiers to cater to those different segments—up to a maximum of three tiers.
“Your options are one, two, or three,” Forth says. “I would almost never go beyond three tiers.”
“We're very good at putting things in the middle and on the left and on the right. We are less good at dividing things into gradations of five. Or gradations of 10. It becomes much fuzzier and much more difficult to do. … We have to support and respect human psychology and how people make choices and giving people too many choices often results in them making no choice at all.”
And one good reason to have a single tier: “As soon as you give people a choice, you introduce another choice, which is the choice not to buy at all.”
Monthly and annual podcast subscription offerings
If introducing choice can complicate things, does that mean you shouldn’t offer both monthly and annual subscription options?
The answer is no. “People have been trained by the market to expect the option of monthly or annual subscriptions,” says Forth. They still count as one plan, just split into two ways to pay for it.
Annual subscriptions tend to be popular. “I've seen significant improvements to revenue when people start offering annual subscriptions,” says Forth. Here at Supercast, we find up to 40% of subscribers will choose to pay for a year upfront, rather than going month to month.
Should you offer a free trial of your paid podcast subscription?
Free trials of your paid subscription give people a taste of what they’ll get if they choose to buy. They tend to work really well in moving people to paid plans because they’re a low-risk first step. And once listeners are enjoying the benefits of the paid plan, inertia can make it hard to turn them off.
The key to making free trials work for you is setting the right length.
Steven Forth on trial length:
We’ve found 7 to 14 days is a good length for free trials, but ultimately, it depends on your podcast and your audience. This is something you can and should test once your program is launched.
Market averages for podcast subscription pricing
Most podcast subscription prices fall in the range of $3 to $15 per month, and in this range, most listeners are not particularly price sensitive.
You can, of course, price higher—and should—if the value your listeners are getting from your podcast warrants it.
“If your positioning is that you are extremely high end, that you appeal only to a small group of people, but you create tremendous value for those people, then you will want to price much, much higher,” says Forth.
Steven Forth on knowing the frame but pricing on value:
On the other end of the range, really think twice about pricing your podcast subscription under $5 per month. The lower the price, the lower the perception of value. Plus, building a sustainable business off subscriptions of $1, $2, or $3 is incredibly hard.
It can be a struggle to believe you’re worth more, but stay focused on what you deliver. You’re not asking for charity. You’re not busking. You’re offering people something they value.
These magic numbers can boost your conversion
Forth says there are three numbers that work like magic when they’re at the end of a price: 5, 7, and 9. “Something that costs $10 will sell much less than something that costs $9.99 or $9.97 or $9.95.”
Most podcast subscription plans are priced in whole dollars, though, rather than dollars and cents. So it would be worthwhile experimenting whether $9 (magic number) vs $10 would get you more conversions.
For more tips on how to price your podcast subscription
Listen to the complete Supercasters interview with subscription expert Steven Forth, and become a free premium subscriber to access the extended interview.
Ready to set up your subscription program? Read what’s next in our Subscription Guide with Chapter 6: Setting Up Your Podcast Subscription Program.