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Change your business model and kill your business? (2005) (intuitive.com)
6 points by jasonlbaptiste on July 12, 2009 | hide | past | favorite | 4 comments


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.


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".


... and meetup is still alive and kicking.


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.




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