There is a lot of advice out there about how to run your business, and some of it is actually pretty good. However, in a competitive marketplace you can't let slavish obedience to commonplace wisdom turn you into a clone of the shop next door. It pays to be different. One way we have decided to break away from the herd is price: setting your price isn’t just about revenue now, it’s about building a brand that can drive your business - and your sales revenue - down the road. Let me tell you about how we are building a unique brand in part by ignoring a couple received dogmas of the CRM pricing.
(Don't) Increase Prices
In the software-as-a-service (SaaS) business, everyone is quick to remind you that if your customers are paying you a certain amount each month, you can double your revenue by doubling your monthly rate. Many of these SaaS companies are startups as well, and have other reasons to pull a bait-and-switch on their early customers. The practice, in addition to being annoying (or worse) to the customer, is ubiquitous. Although doubling your near-term revenue is nice, there is a hidden opportunity cost: a missed chance at being a memorably different company.
(Don't) Use Tiered Pricing
The common wisdom is to build choices into your pricing, offering different rates for different packages of service. In the spirit of the "Increase Prices" maxim, one naturally ends up heavily restricting the offerings to the bottom tier and charging a lot of money to the top one. This practice is almost universal in CRM pricing. In addition to being a potentially annoying sideshow, this practice limits your ability to build a brand because you are carefully withholding your best offerings from most of your customers. The cost of extracting maximum revenue via tiered pricing is a chance at building a brand by showing all the things you do well.
At Less Annoying CRM, we offer simple flat rate pricing and a commitment to keeping that flat rate the same over time. Everyone else is doing otherwise, so we know there are opportunity costs that come with this policy. There are also advantages, though, and because everyone is doing something else the superior service we offer is that much more obvious to the customer. We are willing to cut against the grain because we want to offer something better and because we believe it pays to be different - you can sell more, and gain more revenue from it, when you embrace offering a product that is valuable and unique.
Get on Twitter and tell me (@MuellerAC) about your experiences being different.