If you create really impressive value for your best customers, and you charge them for it, it is probable that some people will hate your business for doing this, and criticise it.
This is important to acknowledge right from the start.
- If you are doing something different, it is likely to happen. Be ready for the criticism.
- If some people are buying, the people criticising are not your customers.
- Adjusting to their comments might hurt the customers who do value what you are doing.
- And like the Godfather says, it is not personal, it is strictly business.
I once organised a charity race, and charged a hell of a lot of money for people to run. And then I had higher level tiers for other people to run that gave even more money to charity. I think, although I didn’t do exhaustive research, that it was the most expensive race in the world that year.
Some people got really angry. They thought they had a right to run in the race we had organised. They thought they had a right to race without donating money to the charity the organisers had chosen. They got quite personal about it.
I had to remind myself that this meant I was doing the right thing. I had customers prepared to pay anywhere between five and 20 time more than the complainers wanted to pay, and it was as many runners as I could handle. It meant that I could focus on really creating the value I wanted to create for them, making it feel really special.
You have to do the same. Some people might not be able to afford your product. They aren’t your customers. Some people might not like your product, but claim that it is too expensive as an excuse. Even if you cut your price, they still wouldn’t be your customers.
You can define your customer by who they are NOT just as well as you can define them by who they are. Focus on making the product well, creating exactly the value you want to create for exactly the customer you want, more than anyone who complains.
And then change.
Once you have established a level of demand for your product, on a later iteration, see how you can change what you do, to capture a wider market. If you have what’s called an “elastic demand curve”, cutting your price a little might bring you a lot of customers. Creating a second or third product/service tier might open up a price point that more customers like than the top one. Create a promotion, give out a voucher, or do other things that widen your market…
But remember that not everyone wants what you are doing. More people will not want it than want it.
Focus on your true fans, give them what they want, create the value they need, and your business will be more secure.
And then we’ll look at how we capture some of that value.