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Selling Tickets with Startup Megatrends (awesomezombie.com)
10 points by swombat on Nov 13, 2009 | hide | past | favorite | 3 comments



Credit to a friend of mine in software: one single trial user is a perishable resource, because their propensity to convert declines sharply the longer they have been in your database. Accordingly, before they "age out" it is worth taking a few stabs at finding an offer they'll respond to.

My friend has no price listed on his website for the software -- you pay the price the software tells you to pay. There is a bit of a secret sauce involved but, in general, the idea is that it costs $X on day 0 but you'll be given an automatic $5 discount on day 5, a bundle deal with a $10 off coupon later, etc etc.

Other software vendors have expressed skepticism that anyone would ever put up with this, but he apparently does pretty well for himself.

Incidentally, he has a desktop app but I think you could get scary sophisticated with a web app for this, because you can make the marketing correspond to user behavior. For example, I got bored one day and implemented a FAKO score (like FICO, except fake) which predicts a trial user's likelihood of converting based on their observed behavior. If I extended that a bit to take into account some lifecycle related factors, I could hypothetically mail everyone with "sitting on the fence" FAKO five days into their trial with a $5 off coupon, with the goal of pushing them over.


The downside of yield management is that it upsets the buyers. A couple times a week I go to my favorite lunch spot, and I know exactly what I'm going to order and how much it will cost. If one day I walk in at it costs $20 to buy a burrito, I'd find somewhere else to go and I wouldn't go back.

Also note that a lot of sites would rather run house ads instead of squeezing every last drop of $$ out of an ad space, for aesthetic reasons.


I'm the author of the blog, so if anyone has any questions on the topic shoot :-)




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