Packaging and pricing for a B2C online learning provider
Developed a pricing and packaging strategy to fuel profitable growth for a B2C online learning provider recently acquired by a PE firm.
We supported a client team to develop a new model for this K-12 education provider that would enhance conversion and extension rates, improve cross-selling and upselling, and better align price with value delivered. Based on our customer and competitor insight and analyses, we developed a good-better-best model set to drive significant new user growth and lift average revenue per user by 2% a year.
Context
Our client was a fast-growing digital learning provider to the K-12 (Primary and Secondary) education markets in a number of European countries.
Hitherto largely steered on subscriber growth, the company had recently been acquired by a private equity owner and developed a value creation plan with pricing and packaging a key lever to both growth and profitability.
Approach
Our team of pricing and analytics experts joined with the head of marketing and a broader client team, first forming hypotheses and conducing face to face interviews with customers and non-users and analysing competitor pricing and packaging.
We designed and delivered a field survey, and conducted rigorous analytics drawing on best practice pricing techniques (e.g. Van Westendorp, Gabor-Granger) and on our own specialist team’s deep experience. From here we developed a comprehensive pricing and packaging proposition.
Impact
The resulting good-better-best packaging and pricing model is now being implemented, with the first wave including proposition and systems changes to enable the transition. Recent piloting showed conversion rates significantly up and sales of the new packages tracking as forecast: the new scheme is estimated to deliver an annual 2-3% additional users and 2% growth in average revenue per user, directly impacting the bottom line.