Is It Unfair to Current Users to Adjust Your Business Model?

[sonny_1080]

@MJ DeMarco mentions in TMF that he sold ad space for limo companies and then changed his business model to pay per lead. I'm sure this happens to a lot of entrepreneurs still in the process of building their solution.

My business model began with 2 options - free basic advertising and paid advertising with more features. Long story short, the money is coming in even though consumers are reaching out to me to refer them to a business. Thus, I refer people, they work with these businesses, everybody benefits - except me.

I've decided to take every business listing's contact information down and replace it with my own to adjust the business into a pay-per-email-lead model. To ensure no confusion, I plan to meet with the 56 businesses already signed up to let them know about the change, give them a chance to opt out, sign a terms agreement and collect their CC info to get started sending people their way.

They are not going to like the fact that I'm replacing their contact info with my own. They will take advantage of me if I let them. However, I feel some type of way about saying "hey, I know we agreed on this originally, but I have to change it to this now. Is you in, or is you out?" But I have to draw the line somewhere.

How have you guys dealt with this?

 

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[Kung Fu Steve]

Be clear.

Be certain.

Be confident.

You've got this.

 

[The-J]

Your plan is fine. Be prepared for some of them to cancel.

"But what if they all cancel?"

Then you're gonna have to get on the phone with all of them and explain to them what you're doing. Some will be okay with it afterward.

 

[MJ DeMarco]

@Ravens_Shadow had to do change business models midstream, maybe he can explain how he approached it.

I did it as well, gave everyone an opportunity to cancel and get refunds, or transition over to the new system.

 

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[sonny_1080]

@Ravens_Shadow had to do change business models midstream, maybe he can explain how he approached it.

I did it as well, gave everyone an opportunity to cancel and get refunds, or transition over to the new system.

You did pay-per-email-lead right?

That's what I'm thinking about doing. Either that or like a call center where leads call me, I take down what they want, find the right option, say "please hold" and call the business with the lead still on the phone.

Problem is... what happens when they don't pick up... I leave a voicemail on behalf of the lead, call the next one until someone picks up... and if nobody answers (which is totally possible in the early stages while I'm still building the network) then I guess I'll just be like, "alrighty, you left voicemails and they'll be following up with you" kind of thing.

Just thinking out loud.

 

[Kid]

"But what if they all cancel?"

Then you're gonna have to get on the phone with all of them and explain to them what you're doing. Some will be okay with it afterward.

As J said but in opposite direction - call few businesses and tell them that you switch, offer them some initial discount and allow to cancel.

See what first 5 will do then decide about situation.

 

[Johnny boy]

Just worry about if it’s effective or not. Short term AND long term. Usually long term effectiveness involves you not pissing people off too regularly since you’ll need traction and happy customers to grow to any large size. It has nothing to do with fair.

You don’t owe these people anything. Would they take you into their homes if you got thrown out on the street? Would they come get you when your car breaks down in the middle of the night? People who have our backs when we need them are the ones we owe our loyalty. That’s when I think about what’s fair or not. For everything else it’s a matter of effectiveness.

 

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[Ravens_Shadow]

@Ravens_Shadow had to do change business models midstream, maybe he can explain how he approached it.

Not only did I have to switch payment processors and cancel active subscriptions during the 2nd year, but I also had to pivot to a new product after that switch as well because the original product just wasn't making us any serious money. The new product was always going to be part of the business, it just had to come way sooner than expected. It was hard to make the call to switch payment processors or pull the team off our first product, but when money is on the line and something is hindering your growth, you gotta know when to pivot or make hard choices like this.

It was a "Positive EV" situation and in both cases I stood to offer better service to my customers, so I did it. In your case, you need to make money too, so make it happen. As kungfu steve said, just be direct and candid about the situation and your customers probably won't mind. If you perform a good service then it is what it is.

 

[sonny_1080]

Thank you everyone. Very helpful. Love the FLF