Price Model Evolution

Subscription plans are an attractive model for CPG companies and retailers, allowing them to lock in customers while expanding their share of wallet and creating predictable, recurring revenues. However, developing and optimizing a subscription model can be difficult. L.E.K Consulting provides expertise in both the assessment and creation of a new subscription model and the optimization of an existing model, ensuring the positioning and offering of subscription plans matches consumer needs.

Our approach

L.E.K.’s approach to subscription optimization involves a comprehensive assessment of any existing subscription model performance in addition to a review of consumer preferences and competitive offerings to identify optimal positioning. Furthermore, L.E.K. offers additional optional services to identify consumer-level strategy recommendations for optimizing revenue and reducing consumer churn.

	Market assessment: Assess market trends, size and growth, and the evolution of subscription models for products/services in the market
	Consumer survey: Survey and interview consumers to develop a fact base of consumer preferences for subscription plans
	Competitive benchmarking: Research competitor strategies for product/service delivery (both subscription and otherwise) to inform optimal positioning
	Strategy development: Develop recommendations to create an optimized subscription program, model the financial impact and design a go-to-market strategy

Client successes

• A leading sports entertainment content provider, pressured by stagnant sales, and reduced profits and a poorly performing subscription program, approached L.E.K. for a revamped program launch strategy. L.E.K. tested the viability of a premium subscription network by validating demand forecasts, building out business scenarios, advising on subscription pricing and finally supporting the launch strategy execution. The released program was able to attract approximately 1 million subscribers within the first year of launch.

• A publishing company with a 30-year history of deriving a majority of its revenues from high-priced, one-off events wanted to evaluate the opportunity for a subscription model. L.E.K. conducted customer segmentation and potential opportunity sizing, using detailed customer research and cross-industry benchmarks to ultimately evaluate various business models and define a subscription offering and go-to-market strategy.