Centrum Respo is a company that offers online dietary and exercise programs and consultations for people who want to lose weight and live healthier lives. The service is based on the Respo method designed by dr Michal Wrzosek, one of the company's founders. Since it was launched, Centrum Respo has helped over 20,000 people reach their fitness goals.
The initial plan was to hire the Valueships team to help with pricing transformation, but soon after we started, we knew we were in good hands, so the partnership extended to business reporting and analyses. What is the most important for us? The Valueships team ideally takes the initiative. Our cooperation isn't based on "we will give you some tasks, and you should do it" but on their initiative. They observe us from perspective, and after that, they give us ideas & insights to boost our business growth. We were thoroughly impressed by their professional approach, dedication and more than happy with outstanding results, so after the project, we decided to hire Valueships team as strategic advisors.
Michal and his co-founder Pawel were proud of the project, especially given the impressive results. Centrum Respo was growing and the product was delivering real value to its users.
But at the same time, they felt that their model wasn’t perfect. There was a clear value/price misalignment that impacted both clients and the company. The pricing didn’t reflect the results that customers were achieving, and the monetization strategy of the subscription business was limited - there were no expansion revenue options, and clients did not have a chance to use the whole service suite by their request. The previous approach was closer to a fixed price or flat rate subscription pricing model, which, while simple and easy to communicate, limited flexibility and expansion opportunities. Centrum Respo was using a subscription based pricing model, but it was not optimized for value or for generating additional revenue through expansion.
In short: the product was great, but the subscription pricing strategy wasn’t keeping up.
With consistent results and tons of positive feedback, the Centrum Respo team knew that they provided immense value with their service. Slowly but surely, they started realizing that the price didn’t reflect that value, and they decided that a new pricing based on that value had to be created.
The goals were threefold:
Additionally, the team aimed to implement effective pricing strategies that would not only increase revenue but also improve profit margin and manage customer acquisition costs more efficiently.
Since it was quite the challenge, Centrum Respo decided to reach out to value pricing experts (that would be us) to pair up and together tackle the issue.
We started with the necessary leg work - gathering all the relevant data to better understand finances and customer lifecycle. We knew that a significant price transformation was a certainty, so we had to understand how customers were using the service until that moment.
This gave us a baseline: who's buying, what plans they choose, how long they stay, and where the revenue leaks are.
But the most important part was an extensive willingness to pay survey on a large group of people who were previously on a diet or were interested in weight loss, as well as current clients. The survey touched on many significant aspects, such as:
The willingness to pay research was fundamental in every step we took afterward. It gave the Centrum Respo team and us the necessary data and confidence to proceed with the significant changes, including the subscription pricing optimization.
One of the most impactful aspects of the transformation was a major packaging update, including adding one completely new option. Based on the data we gathered, we adjusted each plan to the preferences of different Respo customer segments. The new packaging introduced a tiered pricing scheme with multiple tiers and multiple price points, similar to what leading subscription companies offer. By offering different price points and premium offerings, Centrum Respo was able to better serve diverse customer needs, following best practices used by successful subscription companies. As a result, new pricing highlighted the value of each item in the program and aimed to increase the percentage of users that choose more packed (and more advanced) plans.
But perhaps most importantly, we introduced completely new monetization models - the options to purchase add-ons. It enabled customers to create more personalized experiences and became a new source of revenue for our client. This was a crucial element of the upsell and cross-sell pricing strategy that Centrum Respo didn’t have before.
The research also revealed what to remove. We got rid of several items in the plan because we discovered that they weren’t essential for subscribers and didn’t affect the willingness to pay in a meaningful way. At the same time, we identified features that customers would happily pay for that weren’t available at the time. With that information, Centrum Respo could optimize and expand their offer even further.
We also gave customers more freedom to change their diet plans if they extend or completely change their diet - a small adjustment that had a meaningful impact on retention. These changes contributed to improved customer retention by making the subscription pricing strategy more flexible and better aligned with customer needs.
It's fair to say that the entire project was a quite significant (re)evolution. We changed a lot both in pricing and packaging. And with the fantastic help from the Respo team, we managed to implement all the crucial changes before the end of the year - a time when most people make their New Year's resolutions to change their habits. Perfect timing for a subscription business.
Last but not least, we can't say enough about Michal's and Pawel's role in the project. Their dedication and leadership played a crucial role in every step of the implementation.
Before we move on to the results, we need to point out that in every project, we’re trying to estimate the potential outcome of all the proposed changes. We’re always trying to be as accurate as possible, not overly optimistic. But from time to time, we’re not even in the ballpark.
Centrum Respo is definitely a fast-growing business and the whole growth can’t be attributed to pricing. Nevertheless, after implementing the new pricing rules, Centrum Respo got 60% more revenue over a year on the quarterly, even 19% more than in our most optimistic predictions. The subscription pricing optimization impacted the company horizontally:
The new pricing model also led to increased monthly recurring revenue and overall recurring revenue, which are key metrics for any recurring revenue business.
New clients started to realize higher revenue by moving from the cheapest and shortest plans to medium and longer ones. We helped shift more clients towards longer subscriptions while maintaining the same conversion rate. This shift increased customer lifetime value and generated cost savings for both the company and customers. Existing customer downsell dropped dramatically, and the newly introduced add-ons became a revenue stream that didn’t exist before.
This is a textbook example of how to increase subscription revenue without relying solely on price hikes. When you combine smart packaging, new monetization levers, and data-driven pricing, the results compound.
In addition to the financial results and organizational confidence, we managed to change the way Centrum Respo approaches monetization. After we finished the project, it became clear to our client’s team that areas like pricing and monetization require much more attention, and there has to be an ongoing, data-based process that ensures a company is on the right track. The project demonstrated how an optimized pricing model works to deliver the most profitable pricing strategies and drive customer satisfaction.
And that’s partially why after the project’s success, Pawel and Michal asked us to participate in the company’s strategic workshops to continue our support.
Subscription pricing is a model where customers pay a recurring fee - typically monthly or annually - to access a product or service. This approach has become especially popular among SaaS companies and digital service providers, as it creates a predictable revenue stream and fosters ongoing customer relationships. For businesses, the key to success with subscription pricing lies in understanding customer data and aligning offerings with customer expectations and willingness to pay. By analyzing how customers use the service and what they value most, companies can craft profitable pricing strategies that not only maximize revenue but also enhance customer satisfaction and loyalty. When customers feel that the value they receive matches what they pay, they are more likely to remain loyal, renew their subscriptions, and even recommend the service to others.
Setting the right price points for a subscription service is a delicate balancing act. Companies must weigh their revenue goals against the need to attract new customers and retain existing ones. This requires a deep dive into customer data, careful analysis of market trends, and a close watch on competitors’ pricing strategies. The right pricing model should reflect both the value delivered and the realities of the competitive landscape.
Another challenge is managing customer churn - when customers cancel their subscriptions - and responding to pricing objections. Customer needs and expectations can shift over time, so it’s essential to stay agile. By collecting and analyzing customer feedback, businesses can identify pain points and opportunities for improvement. Regularly reviewing and refining the pricing strategy ensures that it remains relevant and continues to optimize revenue streams. Ultimately, a data-driven, customer-centric approach is the best way to overcome the challenges of subscription pricing and build a sustainable, growing business.
To develop an effective subscription pricing strategy, businesses should start by segmenting their customer base and understanding the unique needs of each group. Offering a tiered pricing model allows companies to cater to different customer segments, providing options that range from basic to premium. Transparent pricing information helps build trust and sets clear expectations, which is crucial for customer satisfaction.
It’s also important to analyze customer usage patterns, willingness to pay, and perceived value. These insights help set price points that align with what customers expect and are willing to pay. Regularly reviewing and adjusting the pricing strategy ensures it stays competitive and continues to meet customer needs. Adopting a value-based pricing approach - where prices are set according to the value delivered to the customer - can further enhance customer satisfaction and drive revenue growth.
Common subscription pricing models include flat-rate pricing (where all customers pay the same fee), tiered pricing (offering multiple pricing tiers with varying features), and usage-based pricing (where customers pay based on how much they use the service). Each model has its advantages and disadvantages, and the best choice depends on the business’s goals and customer preferences. By choosing the right pricing model and continuously optimizing it, companies can maximize revenue, strengthen customer loyalty, and achieve long-term success in the subscription-based market.
+60% increased revenue growth
+5% increased upsell
-12% decreased downsells
+ 19% growth vs. the most optimistic predictions
Vastly increased percentage of clients choosing longer plans
Certified expert in price, revenue and margin management in B2B companies and e-commerce. Member of the prestigious Professional Pricing Society. At Valueships, he is responsible for the implementation of consulting projects and taking care of the profitability of clients. Prior to joining Valueships, he worked at McKinsey & Company in the area of pricing and strategy.
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Certified expert in price, revenue and margin management in B2B companies and e-commerce. Member of the prestigious Professional Pricing Society. At Valueships, he is responsible for the implementation of consulting projects and taking care of the profitability of clients. Prior to joining Valueships, he worked at McKinsey & Company in the area of pricing and strategy.
