Bundling / Classes of Service / pricing / Unbundling / Usage Based Pricing

Unbundling The Product For Micro-Targeting

PowerFrameworks is a website that offers Microsoft PowerPoint frameworks for visually showing concepts. Their pricing strategy stands out as an example of pricing done right. Their pricing is a very good example of product unbundling and pricing the unbundled components separately.

What they sell it as a subscription service with recurring revenue. Their pricing is unbundled along both usage and product features dimensions

  1. Subscription model is unbundling the product along the usage dimension – instead of buying the product all at once the subscribers pay for usage.
  2. What they offer with subscription are PowerPoint slides  with the frameworks, about 400 of them,  that a subscriber can download. For those customers not willing to pay the subscription fee ($149) they unbundle their product and sell individual frameworks at prices starting from $5.50.

Their unbundled pricing for each framework is a clear recognition that the needs of the their customers are not all the same. Hence by unbundling the product they target each niche and allow these customers to purchase only what they need. This reduced customer resistance to purchase and exposes new revenue opportunities compared to a single price.

Another notable point is their unbundled pricing for each framework  ensures that  those who need more than a few frameworks will buy the subscription and not buy them one at a time.Even at the lowest price of $5 per framework and assuming an average customer needs only 50 frameworks, the sum of the prices of the unbundled components is same as that of the annual subscription.

Powerframeworks’ unbundled pricing offers lessons to newspapers trying to unbundle their pricing.

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