Good basic ideas, I wonder at what point the infamous $1,000 limit for lower level corporate purchases is to be considered. That is, if your competitor's software costs $700 should yours be priced $900 or $1900 or even $3500 as the article suggests.
I posted a comment about this on another thread. Basically < $1000 allows a middle manager to purchase it without VP approval.
If you have several competitors and yours is somewhat better, price in the middle. The lowest price will be perceived as the stripped down model even if it is the best. Think refrigerators or televisions. The highest priced one will raise the perceived value of the class.
OTOH if you are selling against an entrenched corporate seller, try an entirely different model. If he is selling a license for $50K per machine, try per seat per year. It lowers the cost of entry but has the potential for huge revenue.
In the software business cost has nothing to do with pricing except that eventually you want your revenue to cover your cost. Cost is for atoms. Software is electrons.
[+] [-] joseakle|17 years ago|reply
http://dl.getdropbox.com/u/113637/softwarepricing/pricing%20...
http://dl.getdropbox.com/u/113637/softwarepricing/How_Do_You...
http://dl.getdropbox.com/u/113637/softwarepricing/Econometri...
http://dl.getdropbox.com/u/113637/softwarepricing/VBSP.pdf
http://dl.getdropbox.com/u/113637/softwarepricing/PricingMet...
http://dl.getdropbox.com/u/113637/softwarepricing/SW_Pricing...
[+] [-] sireat|17 years ago|reply
[+] [-] russell|17 years ago|reply
If you have several competitors and yours is somewhat better, price in the middle. The lowest price will be perceived as the stripped down model even if it is the best. Think refrigerators or televisions. The highest priced one will raise the perceived value of the class.
OTOH if you are selling against an entrenched corporate seller, try an entirely different model. If he is selling a license for $50K per machine, try per seat per year. It lowers the cost of entry but has the potential for huge revenue.
In the software business cost has nothing to do with pricing except that eventually you want your revenue to cover your cost. Cost is for atoms. Software is electrons.