I agree with most of what you said, but there's significant nuance to this piece:
> Finally, higher prices come with higher expectations from your customers. Whereas previously they might shrug off a slow response to a customer support request at $20/month, their $100/month service might lead them to expect more customer support, not less.
This is potentially true, but there's other effects here too:
- When I was doing software and hardware consulting work, the people who paid the most were also the happiest customers. It felt paradoxical for a while until I really let it sink in and stew. Most of the high paying customers would just kind of... take my work products, say "yup, this meets the requirements we agreed to", and run with it. The ones who were paying the least were the most likely to pull the classic "well... is what we agreed to but... maybe you could move that button over to the other side and I've got this other feature idea that we didn't talk about, oh and I don't like how this works... it might be what we agreed to but it's not how it worked in my mind..."
- It sounds like OPs customers took that to the extreme with "customers" who hadn't paid anything at all yet being demanding.
- By going up-market, you can lose customers for sure but it might be worth it anyway. Given the support burden it sounds like 1/5 of the customers at 5x price would be a net win. Especially if it tracks my experience consulting where the remaining high paying customers are happier about your product in general. If you still maintain the same per-customer support burden or even have it climb some it could end up being less work overall.
> Most of the high paying customers would just kind of... take my work products, say "yup, this meets the requirements we agreed to", and run with it. The ones who were paying the least were the most likely to pull the classic "well... is what we agreed to but..."
Drawing on my experience: perhaps the high-paying customers are being represented by dedicated buyers/executives who do not actually use the product themselves day-to-day. So they're happy as long as it _can_ perform its tasks, even if it's slow or clunky to use - they're paying the workers for 40 hours/week regardless, after all.
Meanwhile, the more tight spenders are more likely to be small businesses where the person making the purchase is also a regular user, and any UX flaws will drive him mad every day.
> Finally, higher prices come with higher expectations from your customers. Whereas previously they might shrug off a slow response to a customer support request at $20/month, their $100/month service might lead them to expect more customer support, not less.
This is potentially true, but there's other effects here too:
- When I was doing software and hardware consulting work, the people who paid the most were also the happiest customers. It felt paradoxical for a while until I really let it sink in and stew. Most of the high paying customers would just kind of... take my work products, say "yup, this meets the requirements we agreed to", and run with it. The ones who were paying the least were the most likely to pull the classic "well... is what we agreed to but... maybe you could move that button over to the other side and I've got this other feature idea that we didn't talk about, oh and I don't like how this works... it might be what we agreed to but it's not how it worked in my mind..."
- It sounds like OPs customers took that to the extreme with "customers" who hadn't paid anything at all yet being demanding.
- By going up-market, you can lose customers for sure but it might be worth it anyway. Given the support burden it sounds like 1/5 of the customers at 5x price would be a net win. Especially if it tracks my experience consulting where the remaining high paying customers are happier about your product in general. If you still maintain the same per-customer support burden or even have it climb some it could end up being less work overall.