customers

There are 3 posts tagged customers.

How we increased prices AND demand, and broke economics

All things being equal — or “ceteris paribus,” as Professor Swanson, my phenomenally awesome yet brutally, infamously hard UCLA economics professor corrected us in our first Econ 1 lecture — if prices go up, demand goes down; if prices go down, demand goes up. This “first rule of economics” is pretty intuitive stuff, and I certainly didn’t need my BA in Econ to teach me that. Weird exceptions aside — like so-called “snobbery goods,” such as fancy cars and jewelry, for which inflated prices likewise inflate demand — this general rules tends to hold true fairly universally.

So you can imagine our dilemma then, when we discovered that we needed to increase our prices by a whopping 50%, to $15 per month from $10 per month. Not a small increase, then. And if indeed Prof. Swanson’s lectures held true, then surely increasing prices by 50% would result in a reciprocal decrease by 50% in subscribed customers, and we’d be exactly where we started. All was not looking well then.

And that wasn’t the half of it: this wasn’t just a problem of increasing prices for future customers; we needed to increase prices for current users, too, users who should otherwise have fairly expected to be grandfathered in at their original $10 per month price point.

Thing is though, we didn’t have a choice. The finances just wouldn’t have it any other way.

And so we did it. We increased our prices by 50% not only for future customers, but for our existing customers as well. And remarkably, inexplicably, and against all odds — never mind the beautiful laws of economics — we saw nary a dip in demand; in fact, if anything, we’ve seen a slight up-tick in demand.

This then is the unlikely story of how we increased prices, and demand, and broke economics.

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How your startup can raise prices without pissing off your customers

rising prices ahead

It goes without saying, especially for startups, that you need to engage your customers. Like, really, actually engage them, especially when it comes to things like customer support, technical glitches, billing issues, and so on.

Thing is though, this sort of engagement is passive and reactive. If you really want to one-up your competition, go one step further: be proactive, be preventative, and include them in your startup’s most crucial decision-making moments. Like raising prices.

Here’s how to do it. And why.

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The 5 best ways to actually engage your startup’s customers

There are more articles on leadership and best practices for running a startup written every second than there are sheep in Ireland stripped of their fleece every month. Just check out the various channels on LinkedIn Pulse and have a look. So you’d imagine, then, that every nuanced tip, trick, and fiendish work of magic to ensuring your startup’s success would be well known and understood by every entrepreneur and business owner in the entire universe.

And you’d be wrong.

Because, you see, while the myriad bits of advice are all well and good, and, to be sure, generally quite spot on, there’s one critically important point that, while touched upon by all who write such things, is catastrophically lacking in detail; the sort of detail without which you might as well not even be told about it in the first place.

Imagine trying to follow a recipe — dice 2 onions, melt 3 tablespoons of butter, sear the steak — and then simply, without any additional information at all, cook the fois gras. Nothing else. Just “cook the fois gras.” This would be the culinary equivalent of explaining to somehow how to build an airplane where the 738th step says simply “build engine.”

And that’s precisely the sort of problem with articles on how best to run your startup: while they go into excruciatingly particular detail on just about every possible tactic, they invariably end up, at some point, at Tip #3: engage your customers, which is usually a paragraph or two simply reiterating that you should, in fact, go out of your way to, well, engage your customers, without actually explaining how to engage them, or offering any practicable, actionable ways to do so.

So then. Let’s fix that. Behold: the five ways to actually engage your startup’s customers. Like really, actually engage them.

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