Catch 22 Marketing Dilemma (Web Application)

by 5 replies
Hi all,

I am in the process of designing a web application with a colleague. In fact the project is almost complete and we will have a funding interview next month. He is a programmer and I am a specialist in the industry related to the project theme. I wont go into detail about the subject matter but the purpose of this project is to create a web application where specialists in this specific industry (i.e. the registered companies on the site) advertise their services and the end-user sources them, evaluates their competence and if deemed to match the end users criteria, can be selected for a tender process or indeed selected to carry out the end users project.

The problem is however, in order for us to justify charging registered companies an annual subscription fee on the site, which incidentally is not much, they must be confident that the site is being used on a regular basis by those looking for their skills. On the flip-side, in order for us to encourage people to use the site to look for these registered companies, they will have to know that there are sufficient registered companies to choose from so both situations are interdependant. In a way its a catch 22 situation and we are really scratching our heads trying to determine what is the best marketing approach. Launching the site to early tot he public, when only a few companies are registered, could potetially tarnish the name an people may not return again.
Some points to note:

We will sell companies an annual subscription but if after 1-month, we have sold approx 40 subscriptions, this will still no way justify us launching the site to the public as a reputable search tool.

In order for us to justify the site as a legitimate search tool to the end user, I reckon we would need upwards of at least 2000 registered companies - but who is going to register when they know that their subscription clock has started to tick with their payment but we still cant officially launch the product into the public domain until we have built up many such similar registrations over a long period?

We will incur running, development, marketing costs etc from day one and therefore need to generate revenue from subscriptions.

I would be very greatful to hear from someone who has worked on a web application project with a similar premise and how they have managed to overcome or indeed deal with this issue.

Warm regards,

Matthew
#main internet marketing discussion forum #application #catch #dilemma #marketing #web
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  • Profile picture of the author Brent Stangel
    Offer free trials.

    If you are confident your subscribers will provide enough lifetime value.

    Offer the first quarter free.
  • Profile picture of the author mdallen
    Brent had the right idea, let some people use it for a free trial and in exchange have them make a testimonial for you, maybe even a video saying how your site helped them
  • Profile picture of the author DavePipitone
    You could also test doing a free trial vs. a $1 or $7 two week trial and see which one has a better ROI.
  • Profile picture of the author stephenm44
    You need to look carefully at your break-even costs. Do you have a business plan which sets out your initial cost for development and the ongoing costs of your operation? From that you can work out how many companies you need and what price you need to charge.
  • Profile picture of the author quadagon
    I launched a recruitment business a few years back and we were in a similar situation.

    How do you get job seekers without vacancies and how do you get companies to list vacancies with no job seekers?

    The solution we came to was to set a launch date and charge companies from that launch date.

    This gave us time to build up a list of companies whilst companies weren't being charged for a shoddy service.

    To entice companies in we heavily discounted year one and ran it as a loss leader.

    To attract job seekers we went on a heavy advertising spend and pr push. We were in trade magazines, national newspapers, plenty of ppc and social marketing.

    We hemeraged money for the first year but hit our targets.

    It maybe possible to do a scaled down version of this but you need to know your numbers and be very aware of your cash flow.

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