Sub-plans

[chrisbach]

Question:

Do you make sub-plans start on the 1st of the month?  Or is it 30 days from when they sign up?

If they start on the 1st, then do you pro-rate it if someone wants to sign up on the 20th? if they pay on the 29th do you let them start early? or  how do you convince someone to sign up on the 10th or the 15th when much of the month is gone?

If you make it 30 from the day they signed up, how do you keep track of everyone?

Chris Bach
Music Stop - Movie time

[Tim]

 BTW I don't tier my prices on new releases, right now it's $4.00/$2 days NR & $3.00/3 days Old.

At our store 2-day NR are $3.95, $2.00 each day late (three weeks to two months, 5 weeks is common).  5-day NR are also $3.95, but with just a $1.00 per day late fee (movies leave NR at six months to a year or more, 10 months is common).  All of our sub-plans except # one, the $15 single game plan, will allow the customer to take out 5-day NR's.  [before tax prices]

I'm also thinking of raising my prices by $.25-.50 a rental when I start all the plans. Gives more reason to join.  

We feel strongly about giving our customers a large selection of only the best catalogue, including foreign, indi/art house, classics and even a 4' section of the best silent DVD's ever made.  We charge $3.00 for five days (after tax price) for a catalogue movie, $1.00 each day late, and almost no one complains.  The customers know that they get what they pay for.  With a sub-plan, it would no longer feel like such a risk to rent a silent or indi movie.  I'm hoping our catalogue prices and our selection will positively affect the number of subs; especially from our three neighboring towns, 3 1/2 to 9 miles away, that don't have a store with a selection like ours but do have a lot of people.  

We're not going to run a test exactly, we're just going to go all out in a couple of months, advertising and marketing like crazy!  If profits are significantly down after six months we will abort.  I hope I can get my pricing structures perfect by the time we begin...  Which is why any input is greatly appreciated!

-Tim

I'm using Phoenix software right now and the system will warn me a given amount of days ahead if a subscription is running out.

I'm also going to save all my advertising dollars up for April for when I roll out the full term program. The only reason I did the test first was to check the % of movies first and see what I needed to do to adjust my inventory. It also creates a buzz from the people on the program.

Also with April and May being down months I think it's a great time to start a new program up, customers would be more inclined to come in and rent during those months that way. We could always use the extra income. BTW for people just getting on the program we are asking a three month contract. So any new customers we have not seen before can get their feet wet with our store and we can get to know them. Anyone on the test would go straight to month to month no contract.

I'm also looking at ways to direct-debit accounts for this, it will make it much easier for us.

[Tim]

What are Blockbuster's pricing structures in the Sub-Plan tests they've been running?  And what does Hollywood Video have planned?  

Thanks
-Tim

I have not heard what their prices are yet. I'm sure they will try to offer it lower than any indie can but if they come out with it after our plans are rolled out then we can make some adjustments later.

[videobiz]

Hey Coxvideo and Tim,

one month since your last post on this thread.
Any more news with your test sub plan.

Thanks
JD

[Tim]

Right now, I'm preparing the marketing and advertising, and trying to finalize pricing for the various plans.  I've scratched what was going to be the first, the one-game-only plan, which leaves four.  I'm comfortable with what is now sub-plans #1 and #2, but increasingly indecisive with plans #3 and #4: should these two be $5 less or $5 more than what is listed below???

So many variables...   8O  

Here are my four plans, as they currently stand:  

--------------------------------------------------------------
Includes every rental except the Newest New Releases (usually up to one month old).
 
1.  Two rentals at a time for $19.95
                                                   
2.  Three rentals at a time for $24.95
 
----------------------------------------------------------------
Include every rental.  No exceptions!
 
3.  Two rentals at a time for $34.95
                                                   
4.  Three rentals at a time for $39.95
----------------------------------------------------------------

As stated, input and opinions from anyone is greatly appreciated!  
-Tim

Well due to the success of the test plans we are rolling out our subscriptions a month early. We started them on March 1st.

Here are some observations:
First month people went crazy on the test plan, we had a 89% utilization rate.
Second month it dipped down to 54%, and this month I expect those on the plans for three months to use it even less.
They used the plan not only for the newest movies but to see things like:
1) catch up on older movies
2) see the TV series that would of cost alot to see the whole thing of
3) the B-Movies that they were unsure of before

one thing that both the customers and I liked was for example; on a Sat. night if "Underworld" was out people that were not on the plan were dissapointed because they had to spend money on another movie, where as people on a subscription did not care because they knew they would get to it eventually and there was always something else they did not see.

One major thing I would like to point out is that out of the 18 people on a 2 movie plan, 7 are moving up to 3 movies and 2 more are buying 2 packages.


Now in the past two days I signed up 21 people on subscrtiptions. And many more said they were going to come back and sign up. Only 3 people said they were not interested. In 3 weeks of handing out flyers to people in the store (over 300 of them) only around 10 people said that they were not interested.

Here is a little advice for subscriptions:

1) Make sure to not sell yourself short by making it too cheap right away, easier to drop the price later than raise it.

2) Give them options, make a 1-3 movie plan. This is my guess, that at first most people will sign up for a 1 movie plan becuase it is a cheap way to get a feel for how it works, then later they will move up to a plan that will fit better with thier lifestyle.

3) Don't worry about them ONLY taking the newest movies, they won't.

4) Make it as easy and carefree as possible for them, that is the whole selling point to the subscriptions.

5) Look at the long term not just the short term. Sure some months you may have made more off of certain people but over the course of a year the average would be higher on subscriptions. Imagine if you had almost every customer in your system spending at least $20 a month.

6) People will get a subscription that fits them, your best customers will not buy a 1 movie subscription just because it is the cheapest.

[mcmarc]

I WAS against this for the longest time, but in one day I had three different people from other counties come in.  They all liked what they saw, but couldn't deal with the return times.  So I'm going to test it in May.

Looking back at the previous posts, I'm curious to know what is the most amount of people that have signed up for the plan?  I'm thinking about about going up in $5 increments from 19.95 for 1,2,3 movies out at once.  If I can get 100 people to sign up, that's a big chunk of change!

Is anyone NOT requiring a credit card to sign up for a sub plan?  I've got an excellent return rate, so I'm leaning towards not making that an option.

marc

In two days time I have signed up the following

11 - 1 movie @ $19.99
2 -   1 movie/game @ $24.99
6  -  2 movies @ $34.99
2  -  2 movies/games @ $39.99
1 -   3 movies @ $44.99

All this plus I have

18 - 2 movie test plan
1 - added games to package
5 - added another movie
2 - added another movie/game
2 - added another movie plus got a second package for their kids

[rrvideo]

I'm very interested in this sub-plan idea.  We have actually thought of closing our bricks and mortar store and doing this through the mail.  How do you handle this if you do Rentrak?  What if they do keep a movie for two weeks?  Or 30 days?  If you don't take credit cards how do you get movies back?  I would love to hear from anyone as we are currently looking at selling our store.

Thanks,
Heather
Roadrunner Video

[direct007]

We are going to test one out starting in Jan and running for three months. I started asking some of my customers yesterday and out of the 16 I asked 15 were excited about doing it.
I figure I'll try it at $35.00 a month for 2 movies out at a time and see how it goes. I really hope it works out because this would really help for the slow months and hopfully bring more people in.
Has anyone tryed a sub-plan out yet and if so what were your results?

We just emailed our customer list about our "test" subscription plan.
so far I am getting: "that's a great idea but I really don't have time right now, if you had tried it in the winter, I would have jumped on it"

Are the stores that are already doing it finding that May/June is a weak subscription renewal time because people are busy with other things such as outdoor stuff, graduation, etc. ?

Yeah I have heard that from a few people. However I have also been told that some like to sign up now because the kids are out of school starting next week.

Just a quick update. Started our subscriptions back on March 1st. Did not advertise at all through till last week which was the 11th week. We signed up around 200 people so far. We have had only 4 people cancell because they don't rent movies when the weather is nice. We have also lost another 4 because they moved.

There have been some people that don't even use the subscription that often that are still going on it. Out of sight out of mind. Just like a gym membership.