Tips For Monetizing Your Product & Pricing Strategies
These tips come from a GSF session with Suresh V., EVP and Head of Sales of Naukri and Siddharth Puri, co-founder and business head of Tyroo.
If your product is first in the niche, either start with a freemium model - you'll get a lot of feedback or price it very low and develop a connection with the customer to build trust.
Always remember that your customer is the end customer whom you're primarily serving, even if he doesn't help you get money. For instance, on a jobs listing site, the job seeker doesn't get you any money - the recruiter does. We do not know our indirect customers - and even if we know them, we don't know the value that they derive.
Think yourself as a customer. Would you ever buy what you're selling?
An interesting question that was asked was when is a product ready for serious monetization? The answer to that came was, it's when the app has either 10,000 registered users or 100,000 unique users on the site or 100,000+ app downloads.
It is interesting to know that only 0.0125% of the users engage with the advertisers from email marketing- only 5% people open advertising message sent to the opt-in database until and unless it's highly customized for the audience, out of which just 5% people will end up clicking and going to advertiser's site, out of which only 5% people will end up engaging with the advertiser.
The mobile market has a lot of potential, but is generally not targeted due to the lack of targeted ads, more of youth using it, lack of user’s profiles and the small size of the screen.
The whole world could talk of something as a problem, but can be an opportunity for you. Suresh explained this by telling about his experience at Naukri - post 9/11, the challenge they were facing became their opportunity. The quality of the traffic improvised - NRIs started coming back to India, more recruiters started coming to the website and that is how it grew. He continued his experience by telling about the monetization strategies that Naukri used - it used to advertise on the home page. But they later realised that any job seeker would actually just visit the website and directly search for the job he's looking for - it was essential for them to have targeted advertisements on these search pages and this increased their revenue.
Points to remember
- Evolve your product by listening to your customers.
- Keep the pricing strategy very simple. Don't overcomplicate - especially in the early stages.
- Have special prices for beta customers - build trust for renewals.
"Pricing is not related to costs. Price as how consumer would perceive the value of your product." - Rajesh Sawhney
- Gautam Gupta
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