Is it better to get customers that will pay you more per project, but do less projects, or customers that pay less but do more projects (bulk)?

Our service caters to home building, and the age old question appears- do you go after customers that build less homes, but potentially pay you more per home, or go after homebuilders that may pay less per home, but build much more homes (bulk)? Also, this is a new service that will help to sell homes, but also has a bit of early adopter/glamour angle to it, so is it better to land celebrity early adopters that can spread the word, but this may be at a loss in the beginning, or concentrate on doing as many projects as possible to generate cash flow? Next stage is angel investors and VC to scale, as it is a product as a service, so requires some human on-site presence per project.


If you have already validated the product, I would suggest you to do some market research.
What is the high and the low end that the consumers are willing to pay.

1. How many "Bulk Buyers" are out there and how much do they pay you per home compared to how many "High-End Buyers" are out there and how much do they pay you?
2. Whats the Acquisition costs on both these markets?
3. Can you target both at the same time?

The point being that you will need to understand your market better.

Allow me to compare my business to yours and explain. I provide Services in Digital Solutions. In our Market we have clients who are willing to pay $1000 for an iPhone and then I have my clients like CitiBank who paid in excess of $1,000,000.
Theres only one Citibank but theres 100's of 1000's "$1000 clients" You need to decide is it worthwhile to pursue and deliver on those small clients or go for the big fish.
I will need to deliver a 1000 Small projects to compare to what I made in revenue to that one Single big project.

It just doesnt make sense for the overhead I will need to put in to manage a 1000 clients.

In the end you will need to get that same ratio out for your business and then choose the market you want to target.

Answered 8 years ago

This is a very good question. During various consulting engagements I have directed my clients in both directions. Assuming the quality of the customers are all equal the ideal situation would be diversified between both types of projects. This keeps you from having too many eggs in a single basket or doing so many projects that you may not be doing your best work. The personal solution for you lies in the bandwidth you and your team have. If you are financially stable enough and have the bandwidth to take on larger more lucrative projects you can add them to your product mix. If you are starting or have a tight cash position I would direct you to take on more of a rapid fire approach. In the end you are building a brand (either for yourself or your company) so please make sure the level of competence and professionalism are high.

Answered 8 years ago

After reading through the nature of your business, I believe quality rather than quantity would help you maintain your reputation; so well paid masterpieces done every now and then should do the trick for you. This would give you quality portfolio to showcase to your prospective clients and also eventually give more value to your projects helping you earn more in the process.

Doing less projects that are well paid, you will still have money coming in and yet be left with ample time to think about business growth and development, which wouldn't be the case of you were doing bulk work for less payments.

About the sales part, I believe that celebrity endorsements generally end up taking the focus away from your brand and showering it all onto the celebrity. Its your ad, so your brand is the star. Focus on the content and on getting the message across to your audience, rather than spending your hard earned money on a celebrity endorsement.

Please feel free to call me if you have any other questions.

All the Best!!

Answered 8 years ago

I think you are asking the wrong question. The real question is how to validate that customers are even interested in this service at all, and can you deliver it at a sufficient scale to be profitable in the long run. You are not really concerned about profitability in the beginning, so you're mostly pricing just to get the most customers possible to validate your hypothesis. Then, once you have a consistent, albeit small, demand for your service, you can begin to explore ways to scale and make delivery more cost effective.

Also be careful of learnings collected from early adopters. You'll run out of them eventually, and may need to adjust some of your business to serve the mass market. Best to figure out early how these early adopters differ, and how that affects long term profitability, even if you don't leverage that in the service right now.

Answered 8 years ago

If you're in this for the long haul, quality always trumps quantity. Testimonials and word of mouth is the ideal form of advertising. Once you generate a good income, hire others so you can take on more quantity.

Answered 8 years ago

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