About a month ago I did a small survey to help me update my assumptions about many aspects of the market for Slopes. It had been a while since I got a big-picture view from the skiing and snowboarding community, so it was long overdue. The survey was largely grounded in testing out some large new features I was planning.
(Which I’ve since put on the back burner, at least for now. Man I almost went off the deep end on feature creep. A story for another time.)
Lets take a step back. Why the potential feature creep of doom? At this point I’ve proven to myself that the structure of my new business model is working. Now the goal is growth, in two forms. What can I do to get more people using Slopes? What can I do to get more of my users want to pay for the premium features?
Said creep was about answering the first question.
I had back-burnered another feature a while back, one that I thought was a good idea and would answer the second growth avenue, but one I didn’t make a priority.
Well the survey set off a bunch of alarms telling me to move that idea to the front of the queue. All based on the answers to one question:
Guess what percent of my market is compelled to pay $19/yr for Slopes right now? I’d venture A good chunk of that blue 40%. They’re likely riding spread out over a season, so they’ll be using Slopes frequently over a 3–4 month period. Feels like a good value. Maybe part of that orange 27.7% depending on how many trips they go for. Certainly not the red 21%. I know I wouldn’t pay $19 for an app I’m going to use for a four-day weekend.
I’d venture I’m only servicing 50% — 60% of my total addressable market. Yikes.
It wouldn’t be smart to just lower the price to capture the rest of the market. Unless I cut my season pass price down to ~$5 those weekend-trip users would always consider it too expensive. If I did that I’d need 3x the purchases to “make it up in volume”, and we all know how well that went for the App Store. And besides, thousands of people have voted with their wallet that they think $19/yr was a fair price.
Instead of lowering my price, the idea I wanted to go with was to make new products to address that part of my market. I’ve always had a gut feeling that a “day pass” and a “week pass” option would nicely compliment my $19/yr “season pass” option. This model maps very well to how passes at ski resorts work, in fact it is almost a one-to-one mapping conceptually. Best of all it doesn’t delude my value proposition, it just aligns my offerings with the users’ perceived value.
This strategy of making new products to capture new markets is largely what Apple did with the iPhone SE. Sure, they wanted to test the waters for a premium 4" phone now that a 4.7" is the flagship, but that move was (in my opinion) mostly about bringing a premium product to markets that couldn’t afford the premium price tag.
I may canabalize some of my season pass sales in the process, but I think I have a sweet spot in pricing that’ll keep the season pass worthwhile to many, while opening these up for others who found $19/yr too expensive.
Originally published at blog.curtisherbert.com on June 23, 2016.