pricing software
Tags: computers, economics
- https://neildavidson.com/downloads/dont-just-roll-the-dice-2.0.0.pdf
- Typical follow the demand curve
- Differentiate with marketing
- Differentiate with personality
- Link a product to yourself
- Make people love the brand
- People are more likely to pay for time
- Sell the experience - make the process of buying things good for people
- Objective value tends to trump all
- Find signposts for your work
- Competing on price means minimizing price war
- Versioning segements the software and gives people different features
- Even shifting the top end encourages people to move up their consumption
- Too many versions push people toward the extreme
- Bundling
- Giving customers better value, persuading them to buy more
- Bundling also makes it harder for customers to understand what they’re paying for
- Multi-user licesnes are an example of this
- Free trials
- Possible, but unclear if its actually a good way to make money
- Potentially cannibalizes paid model
- Bargins
- Discounting software works
- Quantities
- Extremely difficult to see large quantities of software
- SaaS
- Paying small amounts easier psychologically
- Recurring payments promote regular usage
- However requires more metrics, and more understanding of customer lifetime and acquisition
- Yearly plans and contracts
- Contracts are generally not good
- Discounting on a fixed range is good
- Pricing models
- Freemium
- Per user
- Per processor
- Per server/box
- Per usage
- Consulting
- Most businesses end with a mixed model
- Make the pricing model boring
- Prices send signals!
- Surveys very rarely work
- Pricing checklist
- What’s the strategy?
- What’s the product?
- How will customers judge the fairness of pricing?
- Who are the customers?
- How are you going to sell your software?
- Can you segement your customers?
- Can you bundle your software?
- Make informed guess at your price
