Work out subscription pricing instantly with clear inputs, formula shown and shareable results.
Subscription pricing has two levers: the headline monthly rate and the prepay discount that buys cash up front and suppresses churn. Lifetime value follows from churn — average lifetime is the reciprocal of the monthly churn rate — and should be measured on gross margin, not revenue.
Annual plan price
Annual = Monthly x 12 x (1 - Annual discount %)
Lifetime value
LTV = Monthly price x Gross margin % / Monthly churn %
Two months free (about 17%) is the common anchor. Anything beyond 25% rarely improves conversion enough to justify the revenue given up.
Because hosting, support and payment fees are real costs of serving the customer. Revenue LTV overstates what you can afford to spend on acquisition.