StubHub CEO on all-in pricing

Key Concepts:

• All-in pricing: Displaying the total cost of a product or service upfront, including all fees and taxes.
• Customer experience: The overall perception and feeling a customer has when interacting with a business.
• Conversion rate: The percentage of users who complete a desired action, such as making a purchase.
• Market normalization: The process of adjusting to a new standard or practice in the market.

Impact of All-In Pricing on Customer Appetite and Revenue

The speaker addresses the question of how their business and customer base have adapted to the shift towards all-in pricing, where the total cost is displayed upfront.

Arguments for All-In Pricing

• Improved Customer Experience: The speaker emphasizes that all-in pricing is ultimately a better customer experience in the long run. While it might lead to some customers dropping out initially, the transparency creates a cleaner and more trustworthy interaction.
• Level Playing Field: A uniform rule like all-in pricing forces all competitors to adopt the same practice, preventing any single business from unilaterally offering a different experience.

Short-Term Impact on Revenue

• Initial Drop-Off: The speaker acknowledges that there is an initial decrease in revenue following the implementation of all-in pricing. They cite examples like New York, where a similar change resulted in a roughly 10% drop in revenue during the first 12 months.
• Data: 10% drop in revenue during the first 12 months in states like New York that implemented all-in pricing.

Long-Term Outlook

• Market Reset and Normalization: The speaker anticipates that the market will eventually normalize after the initial adjustment period.
• Return to Growth: Once the market has reset, the business expects to return to its previous growth trajectory, building upon the new, normalized base.
• One-Time Hit: The revenue drop is characterized as a "one-time hit to conversion" that resets the market before growth resumes.

Notable Quotes:

• "It's just a better customer experience in the long haul."
• "It's just a one-time hit to conversion, resets the market, and then onward and upward you go."

Synthesis/Conclusion:

While the transition to all-in pricing may result in a temporary decrease in revenue due to customers seeing the full price upfront, the speaker believes that it ultimately leads to a better customer experience and a more level playing field for businesses. The initial drop is viewed as a one-time adjustment, after which the market normalizes and growth resumes. The long-term benefits of transparency and trust outweigh the short-term revenue impact.