The minute that you have customers paying any amount at all, you set yourself up for possible competition undercutting you on price. The truth is, whether you h

The minute that you have customers paying any amount at all, you set yourself up for possible competition undercutting you on price. The truth is, whether you have a great or poor relationship with your customers, unless you have legal protections you have very little control over whether competitors will eventually enter your market or not. So you need to always operate as if there is competition breathing down your neck. Pricing strategy has little to do with customer happiness in aggregate. Every price will make some customers happy, and other customers feel gouged, because different customers extract different amounts of value from your product. The key to protect yourself from competition isn't to spend time worrying about how pricing affects your aggregate customer volume, but about whether your customers are happy. Maybe some customers are unhappy because they feel gouged. Maybe you could make them happier by reducing prices. But maybe, you're better off letting them go, if they represent a small minority of your users, and instead focus on what a majority of your users might appreciate more - better service, relevant features, etc. which make them happier.