"Pay as you go" or "subscription" service?
I'm setting up a new venture with my partner designed to leverage on a niche area of web design and consultancy where we have already had some success. There are only two worthwhile competitors and we already have 4 or 5 USPs that will hopefully help us to compete with them sucessfully. Early results are promising.
Both of the competitors offer a "management" service to compliment the original design/branding product which we know is hard sold. This service basically consists of pulling a few stats out of webalizer or awstats, checking search ranking and copy/paste into a glitzy (but essentially limited) report. This info is freely available to the punters if they know where to look but most of them don't bother and end up paying up to £1000 per year for the privilege - about the same as the original services cost!
In setting out or strategy to compete with these guys properly, we are debating whether to a) offer the same "management" service at a lower price b) scrub it and make it clear in our offer that such services are freely available through a typical hosting control panel plus a quick Google search c) offer the service on an "as required" basis or d) offer a worthwhile, value-adding subscription service at realistic fees
A couple of clients we gained recently noted that a major reason for prefering our services was freedom from monthly subscription. So do we gain more from actively promoting a subscription free service or push the subscription route in whatever form?
Thoughts appreciated.
Dave J
Comment by Tom — September 25, 2006 @ 7:56 pm
What about a free "report" or toolkit where you share your expertese with those less in the know, and explain (in simple, step-by-step terms) how they can manage their own sites?
Will help to build your credibility, which in turn might increase the chance of generating new leads.. and you get to maintain your integrity too.
Tom
Comment by burt — September 25, 2006 @ 9:51 pm
Dave, I recently started a subscription service and it's going smoothly.
From the subscribers viewpoint, they get access to a "drip feed" of information, products and services on a month by month basis. If they want out, they cancel…
From my point of view, I get a monthly fee, ongoing. If one of the subscribers is taking advantage, I can cancel and no longer have to service him.
In other words it's very flexible. It's also good to have X number of subscribers paying Y per month - if you offer a good enough service, the churn will be quite low and so you can begine to count on that income as an ongoing monetisation stream.
Comment by One Dollar A Day — September 25, 2006 @ 11:34 pm
Offer it as an optional service for monthly rather than yearly fee, with slight discounts for paying quarterly, bi-anually and anually.
It may be that your clients did actually like the information being presented to them, but did not like having to pay £1000 up front for it.
As for if you charge the same or less…that depends on how long the reports take to produce and how you value your time.
Comment by One Dollar A Day — September 25, 2006 @ 11:36 pm
Hang on I just re-read the post…were they paying monthly for the service already and it was dding up to £1000 a year? In which case, ignore my last suggestion lol
Comment by Dave J — September 26, 2006 @ 9:13 pm
I like the idea of a steady (and growing) income from subscriptions. Tom is right about maintaining integrity and the idea of selling info. that is readily accessible does not sit well.
I need to come up with a real value adding service to pitch at a sensible price (whilst subtly making it clear that the competitors offering is a bit poor :))
cheers guys.