Hello All! I'm getting close to opening up my CoWorking space in the suburbs (Southern California) about 75,000 population. My space is about 8 minutes away from a cluster of top liberal arts colleges. I'm working on my membership pricing.
My space is 1200 sqft. I have 8 designed desks, 14 flex/open spaces, conference, and a shared kitchen.
Would love to hear some guidance.
Thanks in Advance.
Those numbers sound pretty familiar to me! Our first location was only a little bit larger, but about the same amount of space.
For us, the key to making that kind of space sustainable was definitely our basic membership.
The biggest risk at such a small size was that a single desk going unoccupied could have a major impact on the business. We wanted to protect ourselves from that, and still keep memberships flexible.
The idea for the basic membership was borrowed from seeing how relatively small university greek life organizations were able to financially support an entire house:
a larger number of members paying a relatively small amount every month but only really visited the house and shared the common areas helped reduce the costs of a normal rent for the smaller number of people who actually lived there.
This was a big clue to figuring out how to create attractive price points AND a more stable revenue model.
Given your proximity to the colleges, is your community mostly students? Or something else?
-Alex
On Mon, Apr 18, 2016 at 6:06 PM, Ehmandah R. [email protected] wrote:
Hello All! I’m getting close to opening up my CoWorking space in the suburbs (Southern California) about 75,000 population. My space is about 8 minutes away from a cluster of top liberal arts colleges. I’m working on my membership pricing.
My space is 1200 sqft. I have 8 designed desks, 14 flex/open spaces, conference, and a shared kitchen.
Would love to hear some guidance.
Thanks in Advance.
–
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Hi Alex
The college town is relatively close. It's made up of undergrads, graduates and families. The village within the town has a nightlife very busy during the weeknight and weekends.
The space is located in a town of mostly families. (Young and mature).
You're right the basic membership is best for the size of the space. The desks have more space than the open space. Should I stick to charging the same across the board or charge a little more for the desk?
Thanks for your help. I appreciate it.
The space is located in a town of mostly families. (Young and mature).
You’ve gotta get more specific than that 
I CAN tell you that the simpler your pricing model is (fewer options, with clear-at-a-glance differences between them) the better. While we think we’re being “flexible”, offering too many choices makes decisions harder for the prospective member, and makes things a nightmare to administer. Especially at the small size, simpler = better.
I CAN tell you that you are better off pricing on value than on square footage. As soon as you’re adjusting for square footage, you’re inviting people to compare you to renting an office and at that point, you’ve already lost.
I CAN tell you that the sweet spot for pricing considers the constraints of your space, and the people who want to be a part of the community you’re building.
But these are fundamentals. Your decisions need to be based on who is in your community and what you know about them.
Who is in YOUR community, the one you’re creating a space for? Have you done anything to bring people together yet? What kinds of things are those people interested in? What do they do, and what do they want to do?
-Alex
On Tue, Apr 19, 2016 at 1:36 AM, Ehmandah R. [email protected] wrote:
Hi Alex
The college town is relatively close. It’s made up of undergrads, graduates and families. The village within the town has a nightlife very busy during the weeknight and weekends.
The space is located in a town of mostly families. (Young and mature).
–
Visit this forum on the web at http://discuss.coworking.com
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Listen to the podcast: http://dangerouslyawesome.com/podcast
The best advice is to sell to value, but be careful that you know what the value is, and what the opportunity cost is to them. I first worked out what our potential members were doing before we were around and how much that was costing them. In our case they tended to be working in coffee shops, spending about £2 an hour.
From this base I knew that if I sold hourly based packages and priced up based on £2 an hour I’d get no resistance and we’d fill up.
But I know that this isn’t the aim of a business, and what was more important was the additional value I could demonstrate for every extra cost per hour over and above each member invested. Yes we could offer the same coffee and internet speed as the coffee shop, but then we’d be a pay per hour coffee shop (nothing wrong with that, but that’s not my business). So I worked out all the benefits being a member would add to the experience, and priced accordingly. First few people through the door said we were too expensive (some said shockingly so), and why shouldn’t they work from the coffee shop. I’ve got a sales background so this wasn’t new to me- when I worked for the Mars corporation selling coffee machines, my machines were the most expensive on the market by a long way. Handling objections was a way of life. In this case all I did was offer to give the people a tour, and let them give me a chance to prove the value to them. Once they’d met some other people, used the ultra fast internet, the bike lockup etc etc they understood the benefits and they often signed up there and then. If they didn’t then no worries, they could go back to the coffee shop. (Many came back a few weeks later after having convinced themselves, by which time we’d raised the prices, but that’s a different story!)
Point to all this is to share my view, which is to price for value. If you open your space and it starts filling up insanely quick and people just want to sign up, with no objections, no claims you are too expensive, no doubts, then you are too cheap. How you do this without scaring people off, and while being able to test for value? Well what we did was a ‘founder membership’ (at £200/month) during our soft launch- which was ‘priced lower than the membership cost will be when we open’ (£300), and marketed as ‘please come and help test all this out’. We really had no idea what our final price would be, but we at least we had an anchor price (£300) and a special offer. We knew that we’d be able to tempt our very first customers with the special offer, but we didn’t devalue ourselves and gave ourselves wriggle room if we were too cheap at £200 or too expensive at £300. It turned out that memberships flew off the shelf at £200, didn’t sell at all even with the best objection handling at £300, so we ended up launching at £250 and quietly forgot about the £300 claim. It’s not like our founder members complained saying they felt mislead because their founder membership didn’t revert to £300!
We’ve tweaked the pricing over time, and now have the luxury of being so busy and so well known that we can price significantly above the alternatives.
Hope that’s useful
Tom
On Monday, 18 April 2016 23:06:07 UTC+1, Ehmandah R. wrote:
Hello All! I’m getting close to opening up my CoWorking space in the suburbs (Southern California) about 75,000 population. My space is about 8 minutes away from a cluster of top liberal arts colleges. I’m working on my membership pricing.
My space is 1200 sqft. I have 8 designed desks, 14 flex/open spaces, conference, and a shared kitchen.
Would love to hear some guidance.
Thanks in Advance.
Thank you so much Tom for the great advice.
On Wednesday, April 20, 2016 at 6:31:40 AM UTC-7, Tom Lewis wrote:
The best advice is to sell to value, but be careful that you know what the value is, and what the opportunity cost is to them. I first worked out what our potential members were doing before we were around and how much that was costing them. In our case they tended to be working in coffee shops, spending about £2 an hour.
From this base I knew that if I sold hourly based packages and priced up based on £2 an hour I’d get no resistance and we’d fill up.
But I know that this isn’t the aim of a business, and what was more important was the additional value I could demonstrate for every extra cost per hour over and above each member invested. Yes we could offer the same coffee and internet speed as the coffee shop, but then we’d be a pay per hour coffee shop (nothing wrong with that, but that’s not my business). So I worked out all the benefits being a member would add to the experience, and priced accordingly. First few people through the door said we were too expensive (some said shockingly so), and why shouldn’t they work from the coffee shop. I’ve got a sales background so this wasn’t new to me- when I worked for the Mars corporation selling coffee machines, my machines were the most expensive on the market by a long way. Handling objections was a way of life. In this case all I did was offer to give the people a tour, and let them give me a chance to prove the value to them. Once they’d met some other people, used the ultra fast internet, the bike lockup etc etc they understood the benefits and they often signed up there and then. If they didn’t then no worries, they could go back to the coffee shop. (Many came back a few weeks later after having convinced themselves, by which time we’d raised the prices, but that’s a different story!)
Point to all this is to share my view, which is to price for value. If you open your space and it starts filling up insanely quick and people just want to sign up, with no objections, no claims you are too expensive, no doubts, then you are too cheap. How you do this without scaring people off, and while being able to test for value? Well what we did was a ‘founder membership’ (at £200/month) during our soft launch- which was ‘priced lower than the membership cost will be when we open’ (£300), and marketed as ‘please come and help test all this out’. We really had no idea what our final price would be, but we at least we had an anchor price (£300) and a special offer. We knew that we’d be able to tempt our very first customers with the special offer, but we didn’t devalue ourselves and gave ourselves wriggle room if we were too cheap at £200 or too expensive at £300. It turned out that memberships flew off the shelf at £200, didn’t sell at all even with the best objection handling at £300, so we ended up launching at £250 and quietly forgot about the £300 claim. It’s not like our founder members complained saying they felt mislead because their founder membership didn’t revert to £300!
We’ve tweaked the pricing over time, and now have the luxury of being so busy and so well known that we can price significantly above the alternatives.
Hope that’s useful
Tom
On Monday, 18 April 2016 23:06:07 UTC+1, Ehmandah R. wrote:
Hello All! I’m getting close to opening up my CoWorking space in the suburbs (Southern California) about 75,000 population. My space is about 8 minutes away from a cluster of top liberal arts colleges. I’m working on my membership pricing.
My space is 1200 sqft. I have 8 designed desks, 14 flex/open spaces, conference, and a shared kitchen.
Would love to hear some guidance.
Thanks in Advance.
I’m working on it Alex. Thanks for your wealth of knowledge. I’m fairly new to the community.
On Tuesday, April 19, 2016 at 5:41:56 PM UTC-7, Alex Hillman wrote:
The space is located in a town of mostly families. (Young and mature).
You’ve gotta get more specific than that
I CAN tell you that the simpler your pricing model is (fewer options, with clear-at-a-glance differences between them) the better. While we think we’re being “flexible”, offering too many choices makes decisions harder for the prospective member, and makes things a nightmare to administer. Especially at the small size, simpler = better.
I CAN tell you that you are better off pricing on value than on square footage. As soon as you’re adjusting for square footage, you’re inviting people to compare you to renting an office and at that point, you’ve already lost.
I CAN tell you that the sweet spot for pricing considers the constraints of your space, and the people who want to be a part of the community you’re building.
But these are fundamentals. Your decisions need to be based on who is in your community and what you know about them.
Who is in YOUR community, the one you’re creating a space for? Have you done anything to bring people together yet? What kinds of things are those people interested in? What do they do, and what do they want to do?
-Alex
The #1 mistake in community building is doing it by yourself.
Join the list: http://coworkingweekly.com
Listen to the podcast: http://dangerouslyawesome.com/podcast
On Tue, Apr 19, 2016 at 1:36 AM, Ehmandah R. [email protected] wrote:
Hi Alex
The college town is relatively close. It’s made up of undergrads, graduates and families. The village within the town has a nightlife very busy during the weeknight and weekends.
The space is located in a town of mostly families. (Young and mature).
–
Visit this forum on the web at http://discuss.coworking.com
You received this message because you are subscribed to the Google Groups “Coworking” group.
To unsubscribe from this group and stop receiving emails from it, send an email to [email protected].
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