Friday, April 15, 2011

Very simple price plans compromise business in the long term

We are meeting quite a few leads lately. It is very interesting to learn their needs directly from them and also what needs they do not have (yet).
   Some of the content providers are offering content with simple price plans, some of them, I would say, extremely simple price plans. For instance: flat rate - X €/week ... no monthly flat rate, no content bundles, no number of usage based subscriptions.
Bachbill supports those simple price plans but adds value when they become more elaborated and we are wondering if we are too early in this market or even if such enriched price plans are not needed at all.
Whenever an offer consists of a simple flat rate, such product already became a commodity and competition is constraint to two entities only, namely, price and quality of product / service.
>> We believe competition increases when offer gets richer and more elaborated.
>> We think customers love flexibility and want to find products designed specifically for their profile rather than an out-of-the-box solution applying to everybody.
>> Customers like to make smart decisions, let us give them the opportunity to make them.

   Firstly, facing competition only in terms of price. That is a real bad business.
I see market as a continuous negotiation between customer and provider. If you have ever been on sales, you know the best way to negotiate is adding more items to the table and widen the deal. Otherwise you will end up discussing whether your product is cheaper than your competitor's. Nobody will want to go there.
   If your offer is wide, elaborated, rich and simple enough at the same time, you will be offering something appealing rather than cheap.

   Secondly, launching a product to market relying only on quality is very risky. We all would like to have a product that sweats superiority and defeats competition immediately and clearly. But what can we do when our product is not so superior, when it is similar to our competitor's, when we need to struggle to sell it, when we need to find creative ways to attract customers.
   In that situation, let your product manager and engineers improve your product portfolio and work with your marketeers in putting together an appealing offer with options, choices, bundles, promotion codes and so on

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