Not all customers are created equal

I was grabbing breakfast with Donna Wells, then-CEO of Mindflash and ex-CMO of Mint.com, where we had worked together. Donna was just dumping knowledge on me to (hopefully) accelerate our acquisition and growth. She had learned many lessons since taking over at Mindflash.

The advice she gave me then (paraphrased through my own brain-filter) has remained one of the most important things through the growth of our company:

Your lowest-paying customers can often become your highest costs.

Since then, not a week goes by where we don't think about this amazing advice and plan accordingly. Yes, low pricing (compared to our competitors) got us noticed in 2015, but it also attracted people who need low pricing, not high quality. We could have one customer paying $50/mo and another paying $500/mo. Both require support. But the $500/mo customer does not require 10x the support. This meant that the lower-LTV customers actually cost our business more. And that's a problem when you provide equal levels of support and service to all plans offered.

We've grown significantly since then and our pricing reflects understanding of expansion and support costs. However, that advice has kept a significant blind spot in check along the way and remains one of the most important lessons we have learned. I believe we will continually adjust the bottom tiers of our pricing in the years to come, as well.