When your company sells software, rather than a physical good or service, it’s not always obvious how you should price and package your product.
To figure out what worked best for them, the marketing team at Guidebook sent a SurveyMonkey survey to their customers.
Alan Blank, Guidebook’s Vice President of Marketing, explains how the customer feedback they collected helped them solve their pricing problem—and gather crucial insights about their target market in the process.
Take it away, Alan:
I have never been the type of marketer who frequently uses surveys and focus groups to learn about my clients. I prefer Steve Jobs’ philosophy that a good marketer doesn’t ask the customer what he wants, but shows the customer what he wants. But what if you don’t know who your customer is?
It sounds ridiculous, but it’s really easy to be misled by anecdotal evidence into a false sense of customer knowledge. In fact, six months ago a survey revealed an insight that got my whole company to rethink who we serve, and how we sell our product.
To help you understand the dilemma we faced, I’ll tell you a little bit about what my company, Guidebook does. We build a tool that allows non-technical people to easily build mobile event apps. Say you’re planning a big event, like the New York City Comicon, and you want to let people know what types of things are going on around them. You can either print thousands of pages of paper, or use Guidebook to build an app that has all of that information and provides a way for you to communicate with your attendees.
Here’s an example:
Recently, we were rethinking our pricing. We really wanted to move to a subscription model because we wanted more predictability in our revenue instead of wild spikes during event seasons and lulls during off seasons. To do this, we would need to ask our clients to pay us for annual access to our app creation tool, as opposed to paying us a fixed fee per event.
But we were scared. We worried that clients who only used us for 1 event each year would think a subscription was odd. “Why would I buy an annual subscription when I only use the product for 10 days out of the year?” we imagined them saying. And because sales data suggested that most clients only purchased a single event guide from us each year, we knew that this was going to be a deal breaker.
Nonetheless, we sent a survey to our clients trying to gauge their appetite for a subscription pricing model. One of the questions we asked was “How many events do you organize each year?” The results were a huge surprise. 90% of our customers organized multiple events each year, and the vast majority organized more than a handful of events.
When we talked to some of the respondents, and asked them why they only used Guidebook for a single event each year despite the fact that they ran several, they confirmed our theory.
Because we were charging them per-event, they had to make a mental calculation in their head each time they wanted to use it whether it was worth the cost. For all but the biggest events, it didn’t seem like a good return on investment. But if we were to just sell them access to the software, to use for events both big and small, we could greatly increase the use of our product (and our sales), while better serving our clients’ needs.
One important footnote: We didn’t disobey Steve Jobs’ proven marketing wisdom. Instead of asking customers what they wanted, we asked them who they were and inferred the rest. Had we asked them “Do you want a subscription billing model?” I doubt we would have had the same epiphany.
Guidebook develops mobile event apps and venue guides for conferences, universities, and corporate meetings. Their award-winning software allows anyone to make and launch an app in minutes without any technical skills.
Guidebook also publishes expert-driven content about event tech, like this free 70-page professional event planning guide.