<story><title>Which is better: Many customers at low price-point or few at high price?</title><url>http://blog.asmartbear.com/price-vs-quantity.html</url><text></text></story><parent_chain></parent_chain><comment><author>lsc</author><text>eh, for me?  I am type A mostly because I don&apos;t enjoy negotiation and hard sales.  If you have an expensive product, at least in my sector, you are expected to negotiate, sometimes for months on price.  Then you are expected to give a discount to the customers that waste the most of your time.&lt;p&gt;With low-value products?  Here is the price.   want it?   If you want to change the price, sure, sometimes you need to do that, but you change it for everyone.  (In fact, in the VPS sector, It is traditional to change the price for existing customers as well as new customers.  Linode deserves some of the credit for making that traditional.    In the co-lo or bandwidth business, where it&apos;s all negotiated?  it&apos;s traditional to offer like 50% better deals to new customers and to squeeze your old customers until they leave, like it is in real-estate leases.  I recently lowered the price on my low-end co-lo and gave the lower price to all my existing customers, to much surprise. )&lt;p&gt;Right now, I&apos;m trying to move some products that are traditionally sold with lots of negotiation (Like co-location) into the &quot;here is the price, you want it?&quot; model, which is really in everyone&apos;s interest except the salesguy.   And salesguys in this industry make a lot of money;  two big local co-lo salesguys have contacted me;  I know they are good, and that they can bring me customers, as I know a bunch of people that bought through them.  The problem?  they want 10% of the revenue from the customer for the life of the customer.   10% isn&apos;t far from my own target margin for co-lo, and some plans, I don&apos;t even make that much.   And for the life of the customer? through any upgrades down the road?  it seems like a bookkeeping nightmare.&lt;p&gt;The other advantage of having lots of small customers is that if someone wants something that you don&apos;t want to do? (in my case, for instance, people that want password auth to my infrastructure, or people that want to run windows) it&apos;s pretty easy for me to say &quot;That&apos;s not what I do.  Here is a refund;  I hear that provider X can help you out&quot;  - whereas if that customer was 1/10th of my revenue?  I&apos;d be spending all night trying to get a microsoft system working, or cleaning up after a script kiddie broke into a weak password and got into the customer&apos;s management interface.</text></comment>
<story><title>Which is better: Many customers at low price-point or few at high price?</title><url>http://blog.asmartbear.com/price-vs-quantity.html</url><text></text></story><parent_chain></parent_chain><comment><author>molsongolden</author><text>My favorite part of this article was the first half of the summary:&lt;p&gt;&quot;If you want happiness and fulfillment from a small company, strive for B&quot;&lt;p&gt;$10,000/mo revenue with only 10 customers to keep happy vs. 1000 customers to service? Yes, please.&lt;p&gt;Company B could have just as much potential for growth as company A. Sure A has the potential to have more brand evangelists bringing in new customers but B has more time to devote to totally babying their 10 customers and making sure they will be likely to recommend the product/service to others in their industry. Company B only needs 1 referral to make another $1,000 per month whereas company A would need 100 referrals.&lt;p&gt;Also think about upselling down the road, if a company can afford $1,000/mo for your base product they will probably be willing and able to pay for upgrades that will make their work easier or more efficient.&lt;p&gt;I&apos;m not arguing that B is better than A, but I think that B could have just as much growth with less stress.</text></comment>