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So your suggestion is to increase prices just to get rid of "poor" customers? I think this is a really good ethical discussion, and I personally beleive many pr

by XCSme 6y ago

So your suggestion is to increase prices just to get rid of "poor" customers? I think this is a really good ethical discussion, and I personally beleive many products/services are way overpriced because of this, which really raises the bar for small businesses and developers. I am also building a high-quality, high-value product that I am making affordable even for really "poor" webmasters. I am thinking of raising the pricing, but at the same time I still receive messages from devs that are just starting saying that they like by product but it is too expensive for them, which is a bit sad to hear (you create something nice that some people can't afford). But in the end, maybe money really talks.

cleong 6y ago
Low prices attract customers that will demand more features and make more complaints to you then any other demographic. In SaaS higher priced customers are typically more accommodating and in addition you get more resources to meet their demands. Somehow there's something psychological that makes you appreciate a product less when you paid 10$ vs 1000$.
- nashadelic 6y ago
  Do you have a link to back that up? Sounds counter-intuitive to me. People who pay more would demand more?
  - makeee 6y ago
    This is my experience as well. One way to put it is that people that tend to demand more also demand lower prices.
  - cleong 6y ago
    It's kinda late but https://hn.algolia.com/?query=patio11%20%22pathological%20customers%22&type=comment&dateRange=all&prefix=false&page=0&sort=byDate https://hn.algolia.com/?query=patio11%20%22pathological%20cu...
nashadelic 6y ago
I think you want to build your business out first. Once you're there you can use higher paying customer to subsidize lower tier customers very similar to how business travel works. In the SaaS world, that's like Intercom or HubSpot giving their entire services or $50/m if you're a startup which is <$1M in rev, founded <2y ago etc. The other shortcut is venture subsidized growth where you sell for cheap to show growth with the hope you'll have net negative churn and the expanded revenue will make up for it. This is highly segment dependant. But as the founder of Intercom said: startups make a poor market, there's no recovery from death. So choose wisely.
brauhaus 6y ago
This is not the case here, but my opinion is that if you still haven't reached product market fit and your value proposition is still changing, it makes sense to charge less, get more customers and, with that, more feedback. Besides, with more customers you can have the luxury of deciding which segment you actually want to serve and start refining the product for them (thus increasing the value proposition and allowing for a higher price point).
hunter-2 6y ago
I was recently introduced to parity based pricing - the app was priced around $99 or so. However if you are from a country with lower purchasing power, they would reduce the price. Same for students or charities. I think more apps need to do this.
- XCSme 6y ago
  That's interesting. Do you remember how the pricing was explained? Did you have to contact them and explain your status to get the discount? I also want to provide more affordable pricing for people with lower purchasing power, but I would do it per person, not based on geolocation. I was thinking to just add some text: "Too expensive? Send me an email explaining your current status and why you want product X and I will make a suitable offer for you".
  - hunter-2 6y ago
    I'm unable to dig out the link now. But from what I understand, it was not coded in the script. Instead, if you were someone from a developing country, you could email them about a discount and the site owner would then send you a unique URL with a cheaper price point. Not scalable at all, but I guess it works for the first several paying customers.

by XCSme 6y ago

cleong 6y ago

Low prices attract customers that will demand more features and make more complaints to you then any other demographic. In SaaS higher priced customers are typically more accommodating and in addition you get more resources to meet their demands. Somehow there's something psychological that makes you appreciate a product less when you paid 10$ vs 1000$.

nashadelic 6y ago
Do you have a link to back that up? Sounds counter-intuitive to me. People who pay more would demand more?
- makeee 6y ago
  This is my experience as well. One way to put it is that people that tend to demand more also demand lower prices.
- cleong 6y ago
  It's kinda late but https://hn.algolia.com/?query=patio11%20%22pathological%20customers%22&type=comment&dateRange=all&prefix=false&page=0&sort=byDate https://hn.algolia.com/?query=patio11%20%22pathological%20cu...

nashadelic 6y ago

I think you want to build your business out first. Once you're there you can use higher paying customer to subsidize lower tier customers very similar to how business travel works. In the SaaS world, that's like Intercom or HubSpot giving their entire services or $50/m if you're a startup which is <$1M in rev, founded <2y ago etc. The other shortcut is venture subsidized growth where you sell for cheap to show growth with the hope you'll have net negative churn and the expanded revenue will make up for it. This is highly segment dependant. But as the founder of Intercom said: startups make a poor market, there's no recovery from death. So choose wisely.

brauhaus 6y ago

This is not the case here, but my opinion is that if you still haven't reached product market fit and your value proposition is still changing, it makes sense to charge less, get more customers and, with that, more feedback. Besides, with more customers you can have the luxury of deciding which segment you actually want to serve and start refining the product for them (thus increasing the value proposition and allowing for a higher price point).

hunter-2 6y ago

I was recently introduced to parity based pricing - the app was priced around $99 or so. However if you are from a country with lower purchasing power, they would reduce the price. Same for students or charities. I think more apps need to do this.

XCSme 6y ago
That's interesting. Do you remember how the pricing was explained? Did you have to contact them and explain your status to get the discount? I also want to provide more affordable pricing for people with lower purchasing power, but I would do it per person, not based on geolocation. I was thinking to just add some text: "Too expensive? Send me an email explaining your current status and why you want product X and I will make a suitable offer for you".
- hunter-2 6y ago
  I'm unable to dig out the link now. But from what I understand, it was not coded in the script. Instead, if you were someone from a developing country, you could email them about a discount and the site owner would then send you a unique URL with a cheaper price point. Not scalable at all, but I guess it works for the first several paying customers.