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Originally Posted by Jeppe
Hey Shap, great to read all your responses in this thread and all the other business threads you have contributed to - fantastic chance to learn from a talented business man!
I have a question for you, that would be interesting to hear from your perspective as a previous site owner.
Are discounted membership prices an advantage for the affiliate? Obviously many factors can affect this, but I am talking overall and of course in our specific case as a review site owner.
I have been struggling to collect some solid data for this, since many factors can vary. But intuitively it would seem like a bad deal for the affiliate if we're talking revshare, unless the member stays a member for considerably longer than normal. Especially if the surfer would be likely to sign up anyway regardless of the price. It seems like a continuous downward spiral only to compete on price.
And a follow-up question: Did price point become a more important factor for Twistys etc. over the years?
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Great Question! And Great to see you here!
I don't have any hard data on this but I think long term competing on price when nothing else changes is not the best strategy. What I mean when nothing else changes is the exact same product being offered at a different price. It would be one thing to offer your review site surfers a heavily discounted price for the past 30 days of updates and then an upgrade to get the entire site. I can see value in doing that. But simply offering a lower price to some affiliates and higher to others just to drive more members is a slippery slope to go down. We did it a little and I can't say there was much of a benefit to it. I will say for the review site there is probably a benefit. If you offer a price that is not available on Twistys.com and is lower than the listed price then surfers may learn they have to signup via your site to get the best price.
I tend to prefer keeping the monthly rate the same but heavily discounting long term members. 6 month and 12 month memberships. We always priced them a tad higher than what our average member was worth to us. So for Twistys each signup was worth $75 to us. That is to say every if we had 1000 joins those joins, would over the lifetime of them, bring in $75,000 revenue for Twistys. So knowing that we priced our 12 month offerings accordingly. I believe we had the at $99 for the year and would mail out an offer of $75 for a yearly membership. While $75/year is far less monthly than $24.95/month it still made sure that we were maintaining our average of $75 per member.
Let me know if that makes sense.