As we mentioned in the last blogpost, we went to Rotterdam to have an intensive week on ‘Contemporary commerce’ to learn more about pricing and marketing. This week went through in the Business school of Rotterdam.
During this week we touched upon a lot of different aspects of the marketing plan and how we should set up the price of our product. Of course, we already worked partly on both subjects, but it was definitely useful to focus for a while on these aspects so that we could set them up in a more thought out and organized way. After this week we continued working on these elements, setting up more specific goals, milestones and plans of action. In this document you will find a lot of chosen strategies, preferred imaging for Quiver towards customers and businesses, price ranges and strategies, the hierarchy in marketing channels, our marketing mix, and much more. The document contains fifteen pages without the cover page and the appendices.
PRICING
To set up the price for our customers, we looked at our customer base and see which different groups there are. For us, there are the users that would be charged for a premium subscription of the app, and the partners to get exposure on the application for their own businesses.
The partners’ pricing is most relevant as it would be implemented first. To get an idea of what they’re used to paying for this now, we did a concurrence analysis. There we found various ways of pricing models. In general, we could split them up in dynamic and flat models. As we have partners of varying size in terms of their business, we prefer a dynamic model. Then we looked at Airbnb Experience and how this model looks like. They charge the people who want to offer an experience based on their revenue they make through the app, by taking a 20% margin of it. This is the same pricing strategy we want to apply for our partners.
Next up we needed to decide how big this fee would be for our partners. For this we did a Cost-based pricing analysis by assuming the costs in the first five years and then see how we can cover the costs based on assumptions on how many partners we would onboard and their revenue they’d make through Quiver. This analysis showed that we would have to take a 19,98% margin in order to cover our predicted costs in Y2. This is coincidentally the same percentage Airbnb experience is applying, working in our benefit as the partners are used to this already then.
For the users, narrowing down the subscriptions went a little different. By analyzing the current market (again a concurrence analysis) we set up a minimum and maximum pricing and decided how we divide the subscriptions up. This turned out to be; monthly, 6-monthly and annual subscriptions. The next step for the partners was to do a cost-based analysis. However, for the users it would involve too many assumptions to be relevant. Instead we decided to ask the potential users of the application and thus set up a Survey and asked 50 action sports enthusiasts. Of these questions, you can find the most interesting results at the end of this post.
The results helped us narrow down the pricing models that stayed in between the minimum and maximum pricing we set up earlier with the concurrence analysis.
MARKETING
For the marketing, we got a lot of tips and tricks for the online marketing as it is now the most relevant way to get exposure. These tips, we also applied on our already-existing Instagram, Linkedin and Facebook accounts:
Mapping out potential influencers on Instagram we can work together and local heroes, made us think about it more. How do we use them in our benefit? What can we offer them?... These are prominent questions that arrived when we did this exercise.
Besides that, we got the incentive to set up a more structured marketing mix and a strategic marketing plan. Having these, as well as a detailed plan of KPI’s, deadlines and goals to reach, are very helpful to measure the performance of your business over time. Another interesting insight we got in this week was concerning the newest developments concerning privacy. Our teacher in this week (Jasna Matic).
Of course we worked further on these subjects after the intensive week in Rotterdam, as it is very helpful to set up our Business Plan. Therefore, we didn't upload all content of these developments as we rather not put certain aspects of the business online. Creating a complete Business Plan for Quiver is the next step, a task that is overlapping with this one and the next one we will discuss in another blog post; The company structure and identity.
Stay tuned.
Survey results;
