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Medium Profitability Pricing Strategy Market Share

Events.com

#Technology #SaaS
ProHub Comment

This is a classic profitability paradox case where market share growth masks underlying margin deterioration. The core insight requires candidates to connect pricing strategy changes to revenue structure and variable cost dynamics—specifically recognizing that switching from a 10% variable fee to a tiered fixed-fee model created a revenue headwind as higher-transaction-value customers entered the mix. Strong analysis requires systematically decomposing the P&L drivers rather than accepting surface-level metrics.

Estimated Time 15 minutes
Difficulty Medium
Source Kellogg
50 / 100
Our client is Prospect Equity Partners (‘Prospect’), a prominent Private Equity firm that invests in the technology space. They have recently acquired Events.com due to strong commercial wins and momentum in the market. Events.com is a leading SaaS-based registration/ticketing platform for Endurance events (5K runs, Marathons, Triathlons, Mud Runs, etc.). They make money by taking registrations and processing payments for events and charging a fee per transaction (similar to Ticketmaster or Eventbrite) ($100 registration price x 10% Fee = $10 in Revenue for Events.com). Events.com has doubled market share since 2015, but in the last two years revenue is flat and profits are down, despite growing share. Prospect wants you to determine what is causing this and come up with a plan to improve profitability.

Clarifying Information

  1. Market: The market has declined ~4% per year since 2015, driven by low participation in experiential runs like Color or Mud Runs
  2. Competition: Two main other players in space: Active Network and RunSignUp. No recent entrants.
  3. Customers: Customers are all in the US. Historically, local 5K events are targeted, but Events.com recently signed IRONMAN triathlon in Q4 2017, which has $125M in transaction volume per year, and other premium events
  4. Product: The product platform is called EventWorks Endurance, and has been around for 10+ years
  5. Company: No changes have been made to company since being acquired by Prospect