On the one hand, it's hard to argue with that. On the other hand: this practice gets out and some people will get annoyed because they feel (rightfully so) that you're (often massively) overcharging them unless they go and haggle about the price. That's great if you run a bazaar business where people go for the experience, but not a feeling your want to instill in regular customers.
> ... and as a business losing $20 a month is better than losing a customer.
This is some serious MBA-speak right here. Losing $20 a month is worse than losing a customer. The only time there's a difference is when you're looking to capture enough market in an unsustainable way so that you can paint a good picture for someone dumb enough to acquire you to try to shut down competition.
If you're well-capitalized, then this is just a straightforward monopolization tactic; if you're not well-funded, this is just gaming the numbers so that a well-capitalized monopolist can come in and use you to play the same game.
If you're a company that is trying to be successful and make money, then you're better off using this as a signal about your pricing.
> This is some serious MBA-speak right here. Losing $20 a month is worse than losing a customer.
I don't think the GP meant the classic "lose money on each sale but make it up on volume" nonsense, but rather "it is better to forgo $20 of your margin than to lose a customer".
I think your read is more accurate than mine. To be honest, the article gave me a bit of indigestion because these sorts of discounting antics always sit poorly with me. I don't have the time or energy to haggle over pricing; and it really bothers me when squeaky wheels get all the grease.
> you're better off using this as a signal about your pricing.
What kind of signal do you have in mind?
It suggests some customers are willing to pay a lower price than other customers. That's not really a surprise, but the numbers are data.
So is the signal that you should lower your price for everyone to something in between, depriving some customers of a service in their happy price range, so that you end up with lower revenue and lose a few more customers as well, but at least you keep a reputation for consistency?