Cheapness Will Not Make Your Company Great

Thinking about creating a new start up? Being the cheapest isn't going to make you a unicorn. Unless you're aiming to create a shoe-string, bargain basement, product that stays at MVP and never grows much beyond, you need much, much more to be successful.

You need a great product that resonates

Great products that happen to be cheap are great products first. Every vendor has the opportunity to increase sales by discounting or giving away part of it's revenue stream in the name of more users, but, this only ever brings in the short-term users who vendor-hop in order to get the best deal. You need to find a way to connect with your customers emotionally so they stay loyal when the next big thing comes out.

Prioritise Quality and Usability

It's much easier to be loyal to a reliable product that's easy to use. If you're product is there, ready to go and easy to access when someone needs to do their Job to be done, then it's going to be much more "sticky" than if you offer it "free for life!". Free for life also means easy to discard. So make sure you're looking at your customer pain points and removing them, not just building new features. Yes, throwing out a new feature gives your marketing team something to write about, but the role of your marketing team is to sell the product, not define it. Of course any part of your organisation needs to be able to feed in ideas, but, your Product team should be making the value calls and your Design teams should be making sure they're easy to use. Then, it's up to your Engineering team to ensure it works well.

Choose your success measures wisely

You need to make sure that you choose your measures of success wisely. Any metric you choose to place front and centre will drive a behaviour over all others. If all you prioritise is cash, your team will take the easiest route to more cash, usually discounts. A natural reaction to that is then to set a cost per acqusition or cost of sales target, which just makes you marketing team look for cheaper adverts. However, when you then move to targeting repeat business, and organic repeat business, what behaviours change then? How do you make sure you're driving people to lower barriers to entry and use and raising stickiness?

Conclusion

Making a new product that's sticky isn't easy, and it can be tempting to try and undercut the market, but, if that's your product's reason to exist you're not going to get very far. Building a high quality product that's reliable and easy to use will engender organic loyalty that's key to building a repeat customer base.