The recession of 2009 affected the entire world. There are very few (if any) businesses and households that didn’t feel the strangling effect of the worldwide credit crunch. With less credit available, many households slashed spending. As a result, many companies were forced to slash prices to attract customer.
Then we look at the porn business. Sales of adult paysite memberships are the lowest they’ve been since at least 2002. Yet site owners refuse to lower prices. In fact, some even raised their prices to try to make up for the loss of sales volume.
Take, for example, my ex-client (who stiffed me for $18k) – Matt’s Models. When sales started their rapid decline in mid-2008, Matt raised the monthly price by $10. In his mind, this price increase meant that it would take fewer memberships to make the same money. As a result, sales declined at an even faster rate and his revenue plummeted.
Clearly, raising prices in a recession is not a smart move.
Why not satisfy your customer’s need to save money by lowering prices? If a cash-strapped father of three needs a porn fix, is he going to choose a $30 site or a $15 site? Of course he’ll choose to save $15. The savings may even allow him to subscribe to another site at the same time.
I tested this theory in the real world on two of the sites I manage for EroBabeCash. The main site, EroBerlin, had a reasonable monthly price of $19.95. However, seeing the summer slowdown take effect, I suggested that we lower the price to $14.95 a month.
We saw the effects immediately. This small discount resulted in a 50% increase in the new sales daily average (from 30 a day – to 45 a day). It also affected the rebills, which increased 10%.
On EroBabeCash’s other paysite – Jan Nudes – I didn’t change the price so much as changed the price psychology. We launched the site with a price of $19.95 for 60 days (2 months). Sales were slow – at between 0 and two a day. In an attempt to change the fate of the site, I adjusted the price to $9.95 for 30 days. Same price just shorter time period. The result of this test was also immediate. Jan’s site had more sales within hours; and new sales shot up to 10+ a day.
The rebill volume on both sites increased due to these changes. To me it says that members are more likely to rebill if the price doesn’t gouge their wallet.
Subscription pricing affects the non-porn world too. I am a big fan of Tom Green. He’s a funny guy and very innovative. He had his own show on MTV several years ago, but TV work is hard to get. So rather than beg for a network TV gig, he now broadcasts his own late-night style talk show from his house.
I respect the fact that Tom bypassed the network TV racket and launched his own web-based TV show, so I became a member of his site about two years ago. Membership to TomGreen.com – with access to his broadcast archive – is only $5.95 a month. A reasonable price by anyone’s standards.
I only have time to visit his site a few times a year, but I happily let the subscription rebill every month. After all, $5.95 doesn’t even register as an expense.
What would have happened if Tom Green had charged $20 a month for a membership? Would I have stayed a member for two years? Its unlikely that i would have allowed that high price to rebill even once, let alone 20+ times. By setting a reasonable and affordable subscription price, Tom has earned $120 of my dollars (and counting).
Considering that most people are looking to save a few bucks these days, less can really be more. Guys don’t need less porn than before. If anything demand for porn is higher than ever. They are just more weary about spending money.
The demand today is not for more (or better) porn, the demand today is for better pricing. Lowering your prices will improve customer satisfaction, increase new sales, increase rebills, and help your site grow during this period of global decline.
NOTE: If you follow this advice and lower your price, add a comment below and get some attention. One more backlink never hurt anyone.