Our thinking on the pricing of our premium environmental scanning service.
We had a real dilemma when thinking about how to price this service. We love what the database does for us and it provides us with enormous value. We estimate that using the system has halved the time it takes us to prepare conference presentations and that is just one use we put it to.
We also recognise that it will be of different value to different people. Some people might use it weekly to dip into for a quick brainstorming session for them or their team, just looking at recent posts. Other people might use it as part of a quarterly review of strategy and assumptions. For others the main value might come from the regular articles.
We also thought that if we priced it too cheaply that may devalue how people looked at the service –“if it is only a dollar a week how good can it be?”
To try and solve our dilemma we asked the test users what they would pay for it and while they were very helpful the answers ranged from $5 a month to $2,000 a year.
In the end we decided to go with $49.95 a year plus GST for the following reasons:
· We were more interested in building a community of users and interactions with that community than creating a small group of high premium users.
· We recognised that in part this was an opportunity for us to demonstrate what we do and how we think. Therefore If we could build a community that was twenty times the size at 1/20th of the individual price that was much better than a small number that brought the same income.
· We strongly believed in the value of the product and therefore felt that word of mouth would overcome the “low cost must be low value” attitude risk.
· If the value mainly came from the regular articles then the cost to us to think about and write those articles was the same no matter how many users, so the more users the better.
We have published our thinking on this due to our belief that we should be as open and transparent as possible to our subscribers and followers.