I sell a monthly subscription and want to offer a yearly plan with two months free; what discount and price is that?

From 'two months free' to a percentage

Annual offers are usually phrased in months because that is easy to grasp, but you need the percentage to compare offers or to set it in your billing system. The rule: free months ÷ 12 × 100.

Work out the yearly price

1. Multiply the monthly price by 12: 100 × 12 = 1,200.
2. Open the Discount calculator and enter 1,200 as the original price.
3. Enter 16.6667 as the discount. The final price is 1,000 and the saving is 200.

Why 16.6667 rather than 16.67? Because the true rate is a recurring decimal. Type 16.67 and the calculator gives 999.96 instead of 1,000, and the bigger the price, the bigger the gap, so use at least four decimals. Likewise, one free month on 1,200 at 8.3333% gives 1,100.

A quicker route when you already know the answer

For this offer you do not need the rate to find the price: 10 months × 100 = 1,000. The calculator earns its place by giving you the exact rate to print on your pricing page, and by checking the price when you stack another discount on the annual deal, such as a code for your first 50 subscribers. Enter both in order and you get the final price and the equivalent discount.

Showing it on your pricing page

• Show the yearly price, 1,000, with its monthly equivalent, about 83.33, next to the monthly price of 100.
• Say 'two months free' or 'save 17%', never 'save 20%', because two months out of twelve is not a fifth.
• If the offer is for one client, such as a support retainer or a monthly service, put it in a quote with the Quotation generator as a fixed discount of 200, since a 16.67 rate on 1,200 comes to 200.04.