To quote Mario Puzo's Godfather, "Make prospects an offer they will not resist". But, that also boils down to a question – Is your offer too sweet? And, how long can you rain discounts? In the long run, are you making your consumers "discount addicts"?
Most new companies, specifically startups offer the best entry prices to build a consumer rentention moat and try to out-beat competition. The losses they make off by slashing prices, is often adjusted by the funding they receive from investors. And, this journey would continue till every other competitor is bound to be completely obliterated. But will competition die? The answer is never.
Gone are the days, when one says "I run a startup", when it did mean something. It was not a word that any longer commands respect, or something a founder enjoys to brag publicly – Running a business is more an than an singular prespective. It conveys, more than a thousand painful emotions. Entreprenuership is more living a life frugally on bread, not worried about the many broken plates, and smile at the numerous risks and challenges faced everyday.
Most startup entreprenuers find it hard to, or rather simply don't understand what "dependencies" mean, and how leaning on something will break a business in the long run. The best advice I got from a industry vetran was just 4 words – "Don't depend on anyone". Business is all about creating and adopting timeless models that will hold you strong against the tide.
It is not suprising why most food-entreprenuers today are willing to sacrifice as much as 30% their sales in aspirations to make a working revenue stream, but little do they realize they are losing their brand equity and clients over pricing. Any other business can capitalize on what one lose in these profit margins.
Most founders are happy to sit in cafes and operate a drop shipping ecommerce, cloud kitchen or brokerage firm. Most startup aspirants do nothing but seeking out prospects, and outsourcing leads for a good brokerage, and are happy doing that the rest of their lives and keep seeking indepdence, but little focus on spending time to realize – how to stand on one's own legs.
The value and trust system behind the coined word, seems totally lost as economy has converged and selling gets more digital. But are consumers still ignorant? Entreprenuership is more about aligning and embracing a profession culture, a discipline or a way of life – which today is by far seems lost in the process of being competitive.
It can cost upto 20x to acquire new clients versus retaining them. Most organizations are focused on new business and are willing to spend more for customer acquisition. Instead of pouring resources into a leaking funnel, startups need to focus on retaining their exisiting customer base and engaging with them meaningfully.
Is price a measure of value?
Definitely NOT, in a different point of view. Imagine selling high ticket sales. Its noted in several occassiosns, consumers are letting price influence how they feel about products/services. A survey found people “don't derive more enjoyment from expensive wine” but are simply swayed over the perception. A good difference between price and perceived value exists.
“Reality is what we take to be true,” as quoted by David Bohm a physicist in 1977. “What we take to be true is what we believe. What we believe is based upon our perceptions." When others decide what have value!
Pricing is a pure perception at play. Why they behave against their own interest is only known by how well they perceive on what a common denominator takes to be true, and its human not to behave rationally.
Habit forming is a great way realize your startup's vision and make consumers stick to your platform. With a focus on MAU/DAU, if your business is able to effectively realize a gap and bridge this demand and supply, there is no real reason to shower more "offers" and make your deals sweeter. Is your engine is able to churn retention rates that you promissed to potential investors? Are consumers able to realize your platform's value in the long run?