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Which is better: Many customers at low price-point or few at high price?

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Re: Which is better: Many customers at low price-point or few at high price?

#11

Post by patio11 »

cantankerous wrote: post #8

Just tossing it out there, but isn't the price point of a product also a big director in consumer expectations? Not that I support making a crappy product, but consumers who pay a lot more generally have higher expectations about what they're spending their money on (rightly so, at times). If you have a 1000 people who figure it's the price of a soda so who cares vs 10 people who won't get off your case about some pe…

You'd be surprised! In my experience, folks who pay A WHOLE NINETY NINE CENTS OF MY MONEY have very shockingly high expectations of polish / quality / feature selection (but no desire to e.g. read what the software actually does), whereas if someone signs e.g. a contract for $X0,000 for enterprise software, it lacks a feature, and they ask for it, "Thanks for the feedback, we'll consider adding that in a later release. In the meanwhile, I suggest ... as a work around" makes them absurdly happy.

For more on this topic, go to HNsearch.com and look for [patio11 pathological customers].

Re: Which is better: Many customers at low price-point or few at high price?

#14

Post by tehayj »

kingrolo wrote: post #12

I've definitely concluded that work hectic is proportional to the number of clients to keep happy, but I imagine this only kicks in above a certain price point.

How clearly and "piss easy" your product or service works makes a big difference too. I run e-learning ventures since a few years and just changing the starting page of a course area can have dramatic influence on the amount of customer support you have to take care of.

After some time having a rather expensive product that is still popular is the best of both worlds and it can work out, especially if you are in a market where people need what you offer.

Re: Which is better: Many customers at low price-point or few at high price?

#15

Post by bignoggins »

patio11 wrote: post #11
cantankerous wrote: post #8

Just tossing it out there, but isn't the price point of a product also a big director in consumer expectations? Not that I support making a crappy product, but consumers who pay a lot more generally have higher expectations about what they're spending their money on (rightly so, at times). If you have a 1000 people who figure it's the price of a soda so who cares vs 10 people who won't get off your case about some pe…

You'd be surprised! In my experience, folks who pay A WHOLE NINETY NINE CENTS OF MY MONEY have very shockingly high expectations of polish / quality / feature selection (but no desire to e.g. read what the software actually does), whereas if someone signs e.g. a contract for $X0,000 for enterprise software, it lacks a feature, and they ask for it, "Thanks for the feedback, we'll consider adding that in a later releas…

Absolutely see this for customers of iPhone apps. If. You're not careful the avalanche of customer service requests on a 99c app can sink you

Re: Which is better: Many customers at low price-point or few at high price?

#16

Post by redidas »

I’ve worked for 2 company Bs so far and can honestly say that I think I’d much rather prefer a company A instead.

Both company Bs are a little over 10 years old, and still run the same software they started out with. They both have had a history of having a few very large customers each year, each of them demanding a lot of customization. It could be the way the each company B handled it, but it shows. The codebase and system architecture is a mess, full of quick fixes and patches because big customer x was requesting feature y.

It’s made for an extremely frustrating system to work with. I’m sure a lot of it could have been avoided, but at the same time things sometimes needed to be done quick and dirty, and the software team probably didn’t have the resources to do things the “right way.” It’s easy to criticize looking back. Probably one of those things easier said than done.

If you are running or working at a company B, please please please think of the future, the business scalability/maintainability, and the sanity of your employees/peers.

Re: Which is better: Many customers at low price-point or few at high price?

#18

Post by bignoggins »

As a data point I have about 900,000 customers to service (iPhone apps). I've also had times in my career where I have had one customer (department of defense). I'm much happier with the 900,000. I think an assumption Jason makes that i would contest is that you need to provide the same level of service to 10,000 people that you would provide to 10. When your app is at a low price point, you aren't competing on customer service anymore. So why try? Just use a virtual assistant to handle level one service requests, have a FAQ, etc.

Re: Which is better: Many customers at low price-point or few at high price?

#19

Post by wensing »

cantankerous wrote: post #8

Just tossing it out there, but isn't the price point of a product also a big director in consumer expectations? Not that I support making a crappy product, but consumers who pay a lot more generally have higher expectations about what they're spending their money on (rightly so, at times). If you have a 1000 people who figure it's the price of a soda so who cares vs 10 people who won't get off your case about some pe…

I can tell you from our experience with Stormpulse that this is 100% false and backwards. Those that pay more are more willing to work with you. Nothing more expensive than someone that expects the world for $10.

Re: Which is better: Many customers at low price-point or few at high price?

#20

Post by paulsutter »

Uniformity and automation.

With only 10 customers, the customers are less likely to be uniform than with 1000. With 10 customers automation is overengineering, but you can only get to 1000 customers if your processes are automated.

So the 1000 customer company seems more attractive to an investor (or candidate employee) than the 10 customer company.

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