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One word of caution--do not, I repeat do NOT, focus on price ("we are cheaper") as the main reason for people to use you. People who are "priced out" of other
by wensing 16y ago
One word of caution--do not, I repeat do NOT, focus on price ("we are cheaper") as the main reason for people to use you. People who are "priced out" of other solutions still need to buy in to whatever you are doing, beyond price, or else you risk losing those customers to your competitors should your competitors offer a cheaper/simple plan.
You're off to a great start (I just signed up for the beta), but make sure you do the hard work of selecting your target customer ("who will we NOT serve?") and don't preach price--preach superior experiences.
- jonnathanson 16y agoExactly. Or, if you do want to compete on price, make sure you're competing for the customer set who cares mostly about price. This is usually a less sophisticated and less needy customer base, which can be a good thing. But it's also a less stable customer base, and generally, you need that many more customers just to get to the same revenue potential as a handful of larger customers with a more expensive product. There are tradeoffs everywhere; just make sure you know which ones you're seeking and which ones you're consciously avoiding.
- melvinram 16y agoIn my experience, "the customer set who cares mostly about price" is almost always never the "less needy customer base." In my experience, the customers set who cares least about price are almost always the least needy customer base. Just my anecdotal experience.
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- jonnathanson 16y agoDepends on the category, really. Also, by "needy," I'm talking primarily about preferences for, or requirements of, feature richness. Really should have phrased it as "fewer (feature) needs" rather than "less needy."
- sudonim 16y agoAgreed. The blog post was great. We use tender for our support, and I took a quick look at freshdesk. Having tickets with priority, type, building and group are way overkill for us and one of the reasons we left zendesk. I'd encourage you to carve your niche in the market by having an opinion and sticking to it, not by emulating zendesk's features and slapping a cheaper price tag on it.
- girishm 16y agoI will request you to reserve your judgement till you have played with the Freeshdesk beta. Just give us a few more days before we open for the public.
- 6ren 16y agophilosophical aside: a low-cost business model is a legitimate disruptive strategy, which many startups follow with respect to physical businesses: travel agents, newspapers, retail, maybe hotels etc. Lower costs enable unmatchably lower prices. I agree with your practical advice; esp when applied to co-disrupters, who also (should) have low costs.
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- wensing 16y agoAgreed, but if I were in those industries I would market the superior experiences those low-costs allow us to deliver, with price merely as an enabler (makes product a viable alternative to commodity/free option, or an accessible entry into something previously reserved for kings). Example #1: Zappos has low costs vs. bricks and mortar so they can afford to do free shipping overnight. Example #2: Southwest has low costs so they don't have to charge for bags. Example #3: ING Direct has low costs so they offer a better interest rate.
- feral 16y agoCounter-example: Ryanair is a hugely successful airline business in Europe. Its advertising and marketing strategy is about low price above all else, and unashamedly so. Look at their garish and ugly website: http://www.ryanair.com/en http://www.ryanair.com/en Count how many times they use the word 'cheap'. Read the wikipedia article, which mentions how badly they treat customers, and their rapid growth and financial success: http://en.wikipedia.org/wiki/Ryanair http://en.wikipedia.org/wiki/Ryanair Sometimes low-cost, sold as low-cost, works well.
- ssp 16y agoRyanair has taken the low-price aspect to an extreme too. For the flights I care about, it's generally something like £5, but once in a while it's literally £0 plus airport fees. I have never been treated particularly badly by them. You don't get anything that might be included in a more expensive flight such as checked bags, a meal, assigned seating, etc., but I don't really care about those things anyway, certainly not for 1-3 hour flights within Europe.
- A1kmm 16y agoConsider doing both with two different brands; with an online business, and a decent MVC architecture, it isn't very hard; a slightly different view for each brand, and different processes around advertising and customer support for each one. If your cheaper brand is so cheap your competitors can't beat it, they won't compete with it on price, and it won't start a price war. That way, you capture the customers who respond to price and the customers who respond to non-price factors, and the market segments could well be different enough to limit cannabilisation of each other.
- wensing 16y agoYou can probably learn enough by being lean that parallel universes isn't necessary.
- lsc 16y agoeh, one of my (much smaller) competitors attempted this. They were larger than I was when they attempted it. Now, they're smaller than I am; so much so that they are talking about selling the company to me. I mean, I'm sure you can do it, but it's difficult enough to maintain one brand, without trying to pretend to be two different companies.
- marklabedz 16y agoThe mental difference between 0 and X is dramatically larger than the difference between X and X+1, no matter what X may be. Focus on the offering and striking a chord with your target market.