Thank you so much Tom for the great advice. On Wednesday, April 20, 2016 at 6:31:40 AM UTC-7, Tom Lewis wrote: > > The best advice is to sell to value, but be careful that you know what the > value is, and what the opportunity cost is to them. I first worked out what > our potential members were doing before we were around and how much that > was costing them. In our case they tended to be working in coffee shops, > spending about £2 an hour. > > From this base I knew that if I sold hourly based packages and priced up > based on £2 an hour I'd get no resistance and we'd fill up. > > But I know that this isn't the aim of a business, and what was more > important was the additional value I could demonstrate for every extra cost > per hour over and above each member invested. Yes we could offer the same > coffee and internet speed as the coffee shop, but then we'd be a pay per > hour coffee shop (nothing wrong with that, but that's not my business). So > I worked out all the benefits being a member would add to the experience, > and priced accordingly. First few people through the door said we were too > expensive (some said shockingly so), and why shouldn't they work from the > coffee shop. I've got a sales background so this wasn't new to me- when I > worked for the Mars corporation selling coffee machines, my machines were > the most expensive on the market by a long way. Handling objections was a > way of life. In this case all I did was offer to give the people a tour, > and let them give me a chance to prove the value to them. Once they'd met > some other people, used the ultra fast internet, the bike lockup etc etc > they understood the benefits and they often signed up there and then. If > they didn't then no worries, they could go back to the coffee shop. (Many > came back a few weeks later after having convinced themselves, by which > time we'd raised the prices, but that's a different story!) > > Point to all this is to share my view, which is to price for value. If > you open your space and it starts filling up insanely quick and people just > want to sign up, with no objections, no claims you are too expensive, no > doubts, then you are too cheap. How you do this without scaring people > off, and while being able to test for value? Well what we did was a > 'founder membership' (at £200/month) during our soft launch- which was > 'priced lower than the membership cost will be when we open' (£300), and > marketed as 'please come and help test all this out'. We really had no > idea what our final price would be, but we at least we had an anchor price > (£300) and a special offer. We knew that we'd be able to tempt our very > first customers with the special offer, but we didn't devalue ourselves and > gave ourselves wriggle room if we were too cheap at £200 or too expensive > at £300. It turned out that memberships flew off the shelf at £200, didn't > sell at all even with the best objection handling at £300, so we ended up > launching at £250 and quietly forgot about the £300 claim. It's not like > our founder members complained saying they felt mislead because their > founder membership didn't revert to £300! > > We've tweaked the pricing over time, and now have the luxury of being so > busy and so well known that we can price significantly above the > alternatives. > > Hope that's useful > > Tom > > On Monday, 18 April 2016 23:06:07 UTC+1, Ehmandah R. wrote: >> >> Hello All! I'm getting close to opening up my CoWorking space in the >> suburbs (Southern California) about 75,000 population. My space is about 8 >> minutes away from a cluster of top liberal arts colleges. I'm working on my >> membership pricing. >> >> My space is 1200 sqft. I have 8 designed desks, 14 flex/open spaces, >> conference, and a shared kitchen. >> >> Would love to hear some guidance. >> >> Thanks in Advance. >> >>
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