As a cursory remark, the $9.95 vs $10, my purchasing consciousness is leaning towards the former. Even though it’s got more digits it feels that much smaller.

It will definitely hit a threshold, but this isn’t necessarily a bad thing. Even if elance is flooded, they still make it easier to find freelancers than it was 8 years ago. Probably the same with haystack, even if it’s flooded, it will still be easier to find web design firms than it was previously. If they get ratings and reviews on there that would help, but I don’t see how they could do it since they can’t verify who actually did business with the firm. We’ll have to wait and see! Anyway, thanks for the thoughtful post….you may just be right.
Brian

As the site ramps up, it hits a maximum visibility ceiling (looking like 1st-3rd rankings for most relevant keywords so far), and then 37signals keeps increasing revenues without our exposure increasing. In fact, as they succeed, our exposure should decrease per visit, since there are more and more of us randomly sorted.

Funny how history repeats itself….this is all so reminiscent of elance.com 10 years ago. Great lead gen at first…then the Indian firms caught on (or were favoured by the Indian owners, depending on who you ask) and the site was flooded with lowball offers and terrible lead generation potential.

If we checked out on that 8 years back, why will this work better?

This isn’t adding a sudden price tag, it’s the opposite, removing the price tag where there used to be one.

I split tested $5/month vs. $9.95/month previously, and $5/month performed worse. This tells me $1/month would be even worse. Keep in mind that when going from $9.95/month to $5/month your conversion rate has to AT LEAST double just to break even. So it’s not simply a matter of getting more subscribers.

See here:
http://www.startbreakingfree.com/1003/results-of-universitytutor-com-price-testing/

Regarding ending the price with a 99 cents or something like, I’m currently split testing $9.95/month vs $10/month. No noticeable difference yet in conversion rate, but I don’t have quite enough data yet.

Coming back to UT and its $10 pricing, you might want to adopt a certain number, like maybe $7, which is more enticing for a user. Of course, it’s your prerogative to keep it at $10, but numbers do make a substantial psychological difference — like how stuffs are often sold at $19.97 instead of $20, or $97 instead of $100.

Interestingly, if you charged $1/mth (which is super duper affordable and when compared to haystack, your customers’ spending power is in perspective here..), would there be a better conversion of tutors? IMHO a $1 upgrade for better listing is a good deal, but what happens when 7000++ tutors upgrade? Do all get the better listing?

Again, it’s your prerogative and with 7000++ tutors, it’s definitely not an easy decision to come up with.

I think if it was me I tend to prefer website that do the latter, but whether it would be more profitable, hard to say. Like I said I’ll do some tests.

Kicking them out is one way of subtly telling them that “If you won’t pay then we don’t want you to stay”. At least from a business point of view its an effecient way of firing off your customers. You dont know how customers feel about the policy.

The sad fact is tutors are also Customers. It really boils down to knowing your customers and giving value to their lives with your products and services. I’m sure you can work something out. More power!

Keywords in subdomains carry a higher weight. Getting incoming links from a bunch of your own subdomains doesn’t work. It was worth it in this case for the SEO benefit (keywords in subdomains) so I’d probably do it again but you’re right it’s a pain to manage an app with subdomains.

On another note, I was wondering why you chose the subdomain model rather than subfolders (www.austin.universitytutor.com vs. http://www.universitytutor.com/austin). In terms of url keywords for SEO purposes, both models would seem to fit the bill, whereas subdomains seem much more difficult to build and could run you into trouble if there is not enough unique content within each one. At one point I thought you had mentioned that you were linking back from your subdomains to your main domain, with the hopes of building a large number of inbound links, but from what I can see it seems all of your subdomains never point back to your main domain. If you built the site again do you think you would keep the subdomains or just use subfolders?

Cool! Thanks for the feedback.