Sitting atop your product is a Halo. Customer retention and growth is determined by your ability and success in nurturing that Halo.
Let me explain:
Customers decide whether to buy your product based on the cost of working with you measured against the value you deliver. If the customer perceives the value of your product to be greater than the price you're charging them, you create a Halo.
Your Halo grows when people feel like you're giving more than you're taking.
But, when they feel like you're taking more than you give, you erode the Halo. If you simply keep raising your price over time with no new value for the customer, soon you will have no halo.
Don't destroy the goodness customers see in you and your product by arbitrarily raising the price without adding more value. You'll inevitably lose their loyalty, they will seek other alternatives and they buy someone else's product.
Instead, you want to nurture the Halo. You do that by asking a customer why they bought from you and how you could make the product even more helpful. Really listen to what they have to say. Whatever that rationale is, ask yourself, how could you deliver that:
Better. Faster. Smarter. More conveniently (for the customer)
Deliver that additional value, and you'll increase the size of your Halo. When that happens, you could either:
Raise your rates and the customer would still be happy, because you still have a halo, or;
If you're trying to outfox your competitor, increase the Halo but not the price, then do some very clever digital marketing around why your product is superior to the competitors at a similar or lower price.
Either way, when you increase your Halo, you are much more likely to retain the existing customers you have. And if you do this well, you’ll then capture the value you created because they will go tell everyone how awesome you are.
The lesson - don’t grow horns by destroying customer value. Instead, polish your Halo.
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