Ask: Pricing Schemes: Nickel And Dime Vs. Yearly Subscriptions

My partner and I are releasing products over the next few months to a large community of people that belong to groups. There are around 35,000 people and about 1200 groups of those people.

Most start ups charge a yearly fee in a freemium model to make their money. While we like this freemium model, I am no expert on what schemes people or groups of people might pay for.

We are debating between two charging models.

Asking each person in the group to pay $4 or $5 a year or what we all would think is a fixed price for our services. This renders about only half of the next idea in profit a year for all the groups if they signed up.

Or we would charge per service rendered. These groups of people have between 7-15 service requests a year. We would charge $10.00 a service This would render at minimum 6 figures a year. We would consider this nickel and diming the customer.

The customer also makes money doing this service we provide that $10.00 I don't feel would make much of a difference on their end figure.

We know start ups like yearly fees, but we think we are both a service company and a software product company. We also know that through the government, they really enjoy nickel and diming folks. And people put up with it. So we think because we are providing a service, we could get away with "nickel and diming" these groups.

Please keep in mind, when I use the term Nickel and Diming, I only use it because people understand it. Its not that I actually feel, we would nickel and dime them. But we are providing a service.

We are also providing a freemium model for our products. So not only would we be charging for services, we would be charging them for our products as well.

I just want advice. Im not expert at services, nor am I an expert at freemium models and we are just getting started. So if you have any experience, please provide.