

Change your business model and kill your business? (2005) - jasonlbaptiste
http://www.intuitive.com/blog/change_your_business_model_and_kill_your_business_meetupcom.html

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SwellJoe
So, I have a vague feeling that "sweetening the deal" when making a change
like this can seem like apologizing, and apologizing means you've done
something wrong. Charging money for a service isn't wrong, so why apologize?
Even if not, I don't think you can win with the folks who get really indignant
about paying for a product.

That said, I think it's wise if you think you're going to eventually need to
raise your prices (and going from free to not free is a price increase) to
have your initial pricing labeled as an "introductory offer". Our prices were
discounted 50% for the first two years of our operation...partly because we
weren't "finished" with the product yet, and partly because we wanted to learn
more about the market and what people wanted to pay. We're doing the same with
our new product just launched a couple of weeks ago.

When you then increase prices later, nobody can feel misled or like they're
paying too much now; they just feel like they got a good deal while it was
available. This probably does have some impact on sales with folks who think
ahead to whether they'd want to pay the higher price later...but I don't think
it would introduce much skew.

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patio11
_Charging money for a service isn't wrong, so why apologize?_

Amen! Charging money, from day one, is a great way to clarify your
relationship with your customers. You're not buddies, you're not a charitable
institution, you're not the welfare office: you do X really really well in
exchange for money. That doesn't exclude people from having warm fuzzies for
you, indeed, doing X superlatively well is a great way to give people warm
fuzzies just for paying you money. (See: Apple, Starbucks, etc.)

Same with raising prices. Prices. Increase. This is a fact of life. Rather
than groveling about "economic necessity" or coming up with a list of 15
reasons you're worth the additional money, just increase your prices, put a
slash through the new price, and say it is on sale (at the old price) for two
weeks so get while the getting is good. After two weeks, "the new price" is
just "the price".

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marram
... and meetup is still alive and kicking.

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skmurphy
You don't have access to the e-mail addresses for your meetup group members so
it's difficult to move to a new service. I think this analysis ignored the
switching costs issues and the fact that it's still free for attendees. The
second point means that there is a large group that is notified when you
launch a new group and they have no incentive to switch to a new system.

