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Perfect Pricing

  • Nov 24, 2019

I launched It's Show Easy as a product over a year ago and yet, I am still struggling to figure out how to price the product. It's not just a matter of how much I should charge users, there is also the question of how often I should charge them and through what mechanism I should collect. Since launch, I have had many conversations with potential customers and I have received a lot of input, but I have to balance that with the pragmatics of the software and my own bookkeeping. With all of this to consider, I have decided to change the pricing, but I still feel like I am just flinging slop to see if something will stick.

The pricing I first posted on the website was largely based on what I had been charging my custom software development customers for basic maintenance of web applications. I never really made any money with those rates, but the monthly fee helped keep my customers' software updated and safe. After over four months of Internet advertising and actively seeking new customers, I still haven't signed anyone new. I am confident that the product would be a huge boon for so many show promoters, so my feeling is that my pricing must not be right.

I have learned that most show promoters receive their income in gluts, the timing of which is based on when their show(s) occur. It makes sense then, that some promoters have indicated to me that they would rather not pay a monthly fee. As a result, I have given great consideration to going to an annual fee instead of a monthly fee, but I worry about that too. At my old pricing, for a single show, the annual fee would have been almost $1000. Asking someone to pay $1000 to start using the product seems like a pretty big barrier to entry especially if they sign up at a time other than when they are collecting most of their income. Maybe it would still work if I collected the payment around the time of the show, but then the user has already received a huge part of the benefit from using the software so the risk makes me uncomfortable. If I lowered the price, the barrier to entry would be less severe, but in that case, it seems like I could just lower the price and stay monthly.

Another approach I have considered is to charge per vendor. In other words, each time a promoter accepts a vendor to their show, I would collect a fee. This would certainly localize fees to the time when promoters are collecting their income. In addition, this would ensure that shows with a small number of vendors are paying less than shows with a large number of vendors. This would also avoid some of the risk of not getting paid after the user has benefited from the software since promoters accept applications long before the show opens. To support per-vendor billing, the software will need to be modified. Whenever a promoter accepts a vendor, the software will add a fee to the promoters bill. Then, perhaps based on an amount-owed threshold, I will invoice the promoter. Alternatively, I could take the approach of taking a little off of each payment made to the promoter by the vendor. I have decided that I don't like this idea because it would require that I handle all of the promoters fees, take my portion and then pay out the remainder to the promoter. Handling all of the promoters' earnings seems like a liability with which I would rather not deal.

So, where am I at with all of this? Well, I think I need to (1) lower the barrier to entry and avoid any large payments, (2) try to focus the promoters' obligations to me around their income peaks, (3) bill smaller shows less and larger shows more, and (4) preserve my current approach of having the vendors pay the promoters directly. Its going to take some software development to manage all four goals, but I can make some adjustments in the meantime. First, I have decided to allow any promoter to do their first show for free. The promoter won't pay anything until their first show is finished allowing the promoter to experience most of the show life cycle using It's Show Easy. This certainly lowers the barrier to entry and I think the product will sell itself. I have also decided to lower the price. My experience so far, and what I am seeing in the market, is telling me that I am just asking too much. Ultimately I am going to switch to a per-accepted-vendor billing strategy to avoid billing promoters when their income is depressed and to allow promoters to pay based on the size of their shows. I need to enhance the software to support the strategy, so until I do, I am sticking with my monthly billing and hoping that the new lower prices will be inviting enough to bring on a few new customers. Finally, any and all support It's Show Easy offers for online vendor payments will continue to route vendor payments directly to the promoter.

There you have it, my hopeful plan for eventually arriving at perfect pricing. I am certainly interested in your input. I am sure I have not considered everything. If you have thoughts on the subject, please email them to info@itsshoweasy.com.

Blog photo by JESHOOTS.COM on Unsplash