I hadn’t checked out Audible membership plans pricing for over 3 years now. When I first registered my membership, there were only 2 real options (if my memory serves me right) – a “Gold” option that gave you 1 credit/book a month and a “Platinum” that gave you 2.
When I checked yesterday, I noticed something interesting – the Platinum “Annual” subscription that gives you 24 credits/year all at once costs less than the “Platinum” option that gives you 2 credit per month (24 credits/year). That’s $50 per year if you buy it now.
I switched immediately and thought that was interesting. My guess is that this is the work of some data scientist at Audible who has probably found 2 things –
1. Annual plans are like gym memberships. They are only reminded they need to renew once a year. The monthly plan probably results in more cancellations than the annual one where you pay upfront.
2. Irrational behavior is more likely in the annual plan. My guess here is that the annual plan results in users with low willpower to use up their credits quickly and then start paying for excess audio books because they are out of credits. Credits are what make Audible’s business model cool as you pay $9.6/book while buying individual books can get expensive very quickly.
Either way, I thought their pricing was very interesting. These are my guesses, of course, and I’d love to understand their rationale behind this.
The big lesson for this week is to take a quick look at the pricing plans of the subscription services you pay for. You might find an opportunity to cut costs and better still, you might get an opportunity to see how these companies use their data and understanding of human irrationality to make more money.
A Learning a Day 