[andrewla]

> ... 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.

[webmaven]

> 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".

[andrewla]

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.

[jlokier]

> 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?