Answer to Question #279026 in Accounting for siri

Question

Suppose you are the CEO of an online apartment rental platform. While the industry is extremely competitive, you have managed to attract a lot of customers, and have been successful in helping more than 5 thousand tenants find and book an apartment.

You have been able to this by targeting students as a market segment, and by making the platform absolutely free. There is no cost for tenants or landlord to use the platform. 

However, the company’s investors now need to see the company generating revenues and profits.

How will you transition the company from its current business model of providing the platform for free, to making revenues? 

Answer 1

1) Giving the customers plenty of attention, and give them a (real) chance to comment/contribute feedback. By doing this, we will be able to know what consumers need and provide services according to their preference, on the other hand, they would be willing to pay the fee if quality services are offered.

2) Fair Pricing the fee to access the platform. Potential customers will be happy to access and pay the fee if it is fair as compared to other platforms offering the same services.

3) Make the transition gradual, if possible — people should only pay if you’re delivering value

This is done by charging a lower fee for the new customers who will access the site and then later slowly raise the fee after customers flood and are happy with the services