Some products or services get more demand when you charge a fee

For the last year, we’ve been running a program called CTOTalk from our Chennai office. It’s been a big success for us, and a great way to connect with some of the best technology minds from product companies in India. We’ve heard from the CTOs of Flipkart, Naukri, Swiggy, Snapdeal, Big Basket, and more.

When we started the program, we wanted to keep it as a free event to allow as many people as possible to come. We promoted the event on many different channels and usually had an average of 175 free registrations.

Given the types of speakers we were getting, we knew the content would be exceptional, but we also knew that not all the people who registered would come. The best we did was get 45% of those who registered to attend, and once it was as low as 31%.

We really wanted these events to be a big success, which meant increasing the quality of the turnout. So, as an experiment, we introduced a little bit of friction to the process. Instead of registering for free, we charged Rs. 200 at the time of registering. We knew this would bring down the signups, but we thought it would lead to a better conversion of the people who actually came and wanted to engage. It was a calculated risk.

But we were floored when we saw the results.

Instead of the registrations dropping, we saw a slight increase from our average number of registrations! It was shocking to us that we would get even more people while asking them to pay.

But the real surprise came the night of the first paid event. To our delight, 69% of people who registered came to the event, making it the best attended one we’ve done yet, both in terms of number of people attending, and in the attendee to registration percentage.

We expected lower registrations, a higher conversion, and roughly the same number of people to come.

We got more registrations, a dramatic increase in conversions, and more people to come.

Also read: 7 tips for even the most timid entrepreneurs to succeed at networking events

When we looked back at the data, we wondered if many of these people were the same ones who came to earlier events, but found that only 30-40% of the people who came had ever attended a CTOTalk event before.

As we look back on why this happened, two major ideas emerged.

By charging a fee, we found people who were interested in serious events. When an event is marketed as free, some people perceive it as just a gimmick to fill a room and not something where actual great content will be discussed. What we thought was an element of friction turned out to be a signal to validate quality. So, there were many people who registered and came precisely because it was paid.
The price indicated a deal. Getting to hear the likes of the CTOs of Snapdeal and Swiggy is a great opportunity. In fact, we could easily price the event at Rs. 2,000 or more and most people would find that to be reasonable. Pricing it at Rs. 200 was obviously undervaluing it, which everyone recognized. Therefore, Rs. 200 seemed like a great deal–something people were more anxious to grab. This was a surprise understanding for us.
Pre-paid registration gave people an additional reason to come. The night of an event like this, many things happen for those planning to attend. Work will go late, or another event will come up. If you registered for free, you are more likely to skip the event because it didn’t cost you anything in the first place. But since people already paid Rs. 200, they felt some buy-in and it was an additional reason not to miss.

As we plan for more upcoming events, we’ll keep tinkering with this system to find the best way to promote and get people to attend these amazing talks on technology.

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This article was first published on e27 on November 30, 2018.

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The post Free is not always the best option, and here’s an experiment in setting value appeared first on e27.