Working in a start-up the question of how we “catch-up” or “stay ahead”, how we keep our product attractive and increase our user base is a daily question. Often we look at are we cheap, competitive. But from looking at how the big “Unicorns” (incredibly successful startups for the uninitiated) get and grow their users it’s obvious being cheap is not the only answer.
Being cheap gets people in the door, you get signups of varying quality, but being cheap doesn’t delight people or retain them. In fact, if you’re just cheap you attract fickle customers, customers who flit to the cheapest deal, so you end up having to cannibalise your own business and profit margin in order to keep customers.
The First Principle of the Toyota Way is “Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.”. In other words, build a brand, build a philosophy, build an emotional connection with your customers and they’ll stay, even if you’re not the cheapest.