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One of the important lessons I learned when I was building websites/doing digital strategy consulting (and this was over a decade ago) was to charge more. I was

One of the important lessons I learned when I was building websites/doing digital strategy consulting (and this was over a decade ago) was to charge more. I was hesitant to do this because starting out, you want to attract customers and you think being competitive and having low prices is the answer. That can work to an extent, but what I found was that all of my clients who I was charging low rates were demanding, needy, and wanted far more than they were paying for. They were terrible. When I raised my rates, the clients I got were much better. No more insane calls at all hours. No more requests for stuff never in the initial SOW. No more threats of finding someone else even cheaper to do it. It’s often hard to know who is a bad customer at the beginning, but once you figure it out, unless the customer is legitimately responsible for a massive part of your business, I agree, fire them. And if the bad customer is responsible for so much of your business you can’t fire them, start looking for a replacement set of customers so that you can work to do that.

tonyedgecombe 6y ago
The bottom end of any market is a cesspit, both for buyers and sellers. I suspect it's the same at the top as well although I have little experience there. I've done quite a few projects for distribution companies, these are intermediaries selling stuff on very low margins, basically warehouses with a call centre. To survive they have to become obsessive over costs. They can't turn that cost cutting mentality off even when they are buying services rather than 10 million transistors or whatever they need. This makes them thoroughly miserable places to work. Amazon is an example but on a massive scale.
- francescopnpn 6y ago
  I agree. But amazon has AWS too which is high-end. I always think that the best business to build or own is the one with the highest margins which usually means catering to wealthy customers. Apple, Tesla, Gulfstream. One exception is if your business accepts payments which can't be reversed such as wires (investment products, some hardware subscriptions)
  - Silhouette 6y ago
    One exception is if your business accepts payments which can't be reversed I do sometimes wonder how much global loss in economic productivity is caused by the various payment methods that allow customers to retrospectively reverse purchases or payments with a high or certain likelihood of taking their money back and possibly also costing the merchant a fee, whether or not the customer has any legitimate basis for doing so. Even with an extremely low chargeback rate, the amount of hassle the occasional chargeback does cause to one of my little businesses is wildly disproportionate. We are generally very keen on looking after our customers and in practice we tend to refund liberally in cases where for example there seems to have been a genuine misunderstanding on the customer's part, even if legally we have no obligation to do so. Consequently, we have a generally very positive reputation, and sometimes even people who didn't find our product was right for them turn out to be good ambassadors. I would gladly decline the probably tiny number of customers who wouldn't buy our stuff without the option to make us give their money back involuntarily in exchange for the certainty we would get, and I don't think our reputation would suffer in the slightest for it. I can only imagine how annoying this sort of issue must be at a much larger scale, like running a fashion store in the current circumstances where most sales are online, and then encountering Rita Returner who wants to buy five new dresses every month but then always returns four of them (one or two now slightly marked and not able to be sold as new) because the law says she can and there's no way to prove she caused the marks. A friend-of-a-friend apparently saw a huge cost to their business from a situation not unlike this in recent months.
  - tonyedgecombe 6y ago
    But amazon has AWS too which is high-end. Yet we keep hearing stories about their abusive employment pradctices, even in AWS. It's in their culture to squeeze every last drop of blood out of their staff.
juskrey 6y ago
Sorry, so how did you go from there to being employed?
Silhouette 6y ago
From the experience of my own businesses, there is often a clear difference in strategy needed for B2B and B2C. If you're doing serious professional work for business clients, you definitely want to charge a serious rate for it. Cheap prices attract cheap clients and all that. On the other hand, if you're making some mobile or web app aimed at the average person in the street who happens to have a certain need or interest, your market may be extremely price-sensitive. Even quite a small increase in prices can cause a huge drop-off in conversion rates. Even quite a small decrease in prices can cause a bump in conversions that easily pays for the difference. Finding the sweet spot is something I would prioritise in any future B2C business I was starting.

tonyedgecombe 6y ago

The bottom end of any market is a cesspit, both for buyers and sellers. I suspect it's the same at the top as well although I have little experience there. I've done quite a few projects for distribution companies, these are intermediaries selling stuff on very low margins, basically warehouses with a call centre. To survive they have to become obsessive over costs. They can't turn that cost cutting mentality off even when they are buying services rather than 10 million transistors or whatever they need. This makes them thoroughly miserable places to work. Amazon is an example but on a massive scale.

francescopnpn 6y ago
I agree. But amazon has AWS too which is high-end. I always think that the best business to build or own is the one with the highest margins which usually means catering to wealthy customers. Apple, Tesla, Gulfstream. One exception is if your business accepts payments which can't be reversed such as wires (investment products, some hardware subscriptions)
- Silhouette 6y ago
  One exception is if your business accepts payments which can't be reversed I do sometimes wonder how much global loss in economic productivity is caused by the various payment methods that allow customers to retrospectively reverse purchases or payments with a high or certain likelihood of taking their money back and possibly also costing the merchant a fee, whether or not the customer has any legitimate basis for doing so. Even with an extremely low chargeback rate, the amount of hassle the occasional chargeback does cause to one of my little businesses is wildly disproportionate. We are generally very keen on looking after our customers and in practice we tend to refund liberally in cases where for example there seems to have been a genuine misunderstanding on the customer's part, even if legally we have no obligation to do so. Consequently, we have a generally very positive reputation, and sometimes even people who didn't find our product was right for them turn out to be good ambassadors. I would gladly decline the probably tiny number of customers who wouldn't buy our stuff without the option to make us give their money back involuntarily in exchange for the certainty we would get, and I don't think our reputation would suffer in the slightest for it. I can only imagine how annoying this sort of issue must be at a much larger scale, like running a fashion store in the current circumstances where most sales are online, and then encountering Rita Returner who wants to buy five new dresses every month but then always returns four of them (one or two now slightly marked and not able to be sold as new) because the law says she can and there's no way to prove she caused the marks. A friend-of-a-friend apparently saw a huge cost to their business from a situation not unlike this in recent months.
- tonyedgecombe 6y ago
  But amazon has AWS too which is high-end. Yet we keep hearing stories about their abusive employment pradctices, even in AWS. It's in their culture to squeeze every last drop of blood out of their staff.

juskrey 6y ago

Sorry, so how did you go from there to being employed?

Silhouette 6y ago

From the experience of my own businesses, there is often a clear difference in strategy needed for B2B and B2C. If you're doing serious professional work for business clients, you definitely want to charge a serious rate for it. Cheap prices attract cheap clients and all that. On the other hand, if you're making some mobile or web app aimed at the average person in the street who happens to have a certain need or interest, your market may be extremely price-sensitive. Even quite a small increase in prices can cause a huge drop-off in conversion rates. Even quite a small decrease in prices can cause a bump in conversions that easily pays for the difference. Finding the sweet spot is something I would prioritise in any future B2C business I was starting.