Developing a pricing strategy for Stievie
Stievie is a TV-watching mobile application set up by the 3 main Flemish broadcasting corporations: VRT, VMMa and SBS. The app enables people to watch television on their smartphone or tablet, live, with a delay or on demand.
The Stievie team approached InSites Consulting in January 2013 before launching the app, to work out a pricing strategy and assess to which extent the app could have a successful launch in Flanders.
What did we do?
We set up a public test phase where a panel of 10,000 carefully selected people could subscribe to Stievie for free and use it on their mobile devices. In order to reach that panel, the 10 participating TV channels aired a public call asking people to sign in for our program. In return this Little Flanders representative test group (age, gender and social status), was invited to fill out 5 surveys at regular intervals during the 3-month trial period (March to May 2013). The surveys probed respectively for the first impressions, first-week usage, willingness to pay, user-friendliness and finally ideal business model. NPS and other KPIs were tracked continuously.
Next to collecting a lot of usage and attitudes facts and observations from the testers, we advised the Stievie team on the pricing of the app. Using the Van Westendorp Price Elasticity Meter, we were able to calculate 4 exact price points for Stievie to consider upon launch:
- the cheap price: cheaper than that, the app would raise suspicion and the perceived quality level would be too low
- the optimal price: the price showing the lowest resistance and the highest market potential
- the expected price: the price that the target group regards as normal and fair for the Stievie service, based on the 3-month trial period
- the premium price: if a price higher than this ‘ceiling’ price were to be charged, Stievie would be regarded as too expensive
Based on this input, the Stievie team launched the app a few months later.
How did the client experience it?
“Thanks to the longitudinal approach of this study we were able to track and observe consumer behavior throughout 3 months of Stievie-usage. It was striking to see how fast people picked up the Stievie-habit and made it part of their daily media routine. That is an example of an unexpected insight that we would never have found with a one-off survey. We truly got closer to the go-to-market reality with this ongoing and more structural survey approach.”
Stefaan Van den Abbeele, Research manager at SBS Belgium