4 ms·

But how do you get over charging for something that competitors offer for free? Even if your product is better in different ways, that's a hard sell.

patio11 16y ago
Stick a price tag on it. [Edit: I wanted to leave that line alone for impact, but it might be read as overly abrupt or insulting. That isn't my intention. I've always had free competitors. They were at the top of the three search terms I most wanted when I started, though I have since learned that I was mistaken about that. One thing I've learned over the years is that I am fairly well informed about the top twenty alternatives to my software and my customers are not. Relatedly, I was very sensitive to the notion of paying $25 for software and my customers were not. And I could put up with a little frustration and ease-of-use niggles to get a deal and my customers viscerally hate that. P.S. I can't decide which is worse, selling to price-sensitive customers or playing price-chicken with someone whose product is free.]
- patio11 16y ago
  Might as well show you, since it is semi-relevant: I started to make my product after an acquaintance of mine wanted a particular activity for class. I told her to Google it. She told me that this was the printed output from the #1 result. http://images1.bingocardcreator.com/blog-images/hn/free-competitors-rock.png http://images1.bingocardcreator.com/blog-images/hn/free-comp... Can you see a woman with a graduate degree feeling effing fantastic about herself for printing that out and giving it to a third grader? Just because it doesn't cost any money doesn't mean it is free. Postscript: that competitor is still in the top 3 for a few related search terms. They run AdSense ads. For me. And they perform the best anywhere on the Internet.
  - newsisan 16y ago
    Sorry just wondering if you could expand a little on this paragraph: They run AdSense ads. For me. And they perform the best anywhere on the Internet.
    - wlievens 16y ago
      I think he means that his competitors run AdSense, showing for keywords that he bids on, so in effect they're just channelling part of their traffic to him. Since it's a competitor, there's a great efficiency in the traffic since the people are actually looking for his product.
      - newsisan 16y ago
        Oh okay, as in they are an AdSense partner - ie they have ads on their website?
rstocker99 16y ago
How often have you picked one product over another because of a key difference between them besides price? Price is an important difference but not the only one and not the most important one for all people all of the time. Be different on something besides price and move on. Before heading down the freemium path be sure to take the time upfront to build two bottom up revenue plans. One plan for freemium and one for strictly paying customers. Be sure and include a detailed breakdown of each of the channels you'll be using to acquire customers and their costs. It's ok to make educated guesses here. It can be quite painful so see how many customer you'll need with freemium before you reach your revenue goal and what it will cost to get them vs. just charging. Are you sure you're setup for that? Does it make sense given the size of your market? Given the likely customer acquisition channels available to you and their costs. Does it work with your budget? Not everyone is Facebook.
parfe 16y ago
3/10 cent a gallon for water delivered straight to the home. $1.50 gallon for a jug in isle 13 at your super market or $1.75 for a 20oz bottle at the checkout counter. Are these all the same product? Do they even compete?
- patio11 16y ago
  That example is going in my playbook. (And the product is available for free, in nigh-infinite quantities, in every occupied building in America. You don't even have to ask for it. In fact, asking for permission to take some would have whomever you asked immediately question your mental state!)
- sgoraya 16y ago
  There is an interesting book by Adrian Slywotzky, The Art of Profitability, that goes over various profit models. I think the above example falls into 'Multi-Component' profit, in that the same product (water) is priced differently in different businesses (super market, convenience store, delivery); since customers behave differently in each purchasing situation you see the ability to price the product in various ways. Another example would be how Coke is priced (to restaurants, grocery stores, vending machine).

patio11 16y ago

Stick a price tag on it. [Edit: I wanted to leave that line alone for impact, but it might be read as overly abrupt or insulting. That isn't my intention. I've always had free competitors. They were at the top of the three search terms I most wanted when I started, though I have since learned that I was mistaken about that. One thing I've learned over the years is that I am fairly well informed about the top twenty alternatives to my software and my customers are not. Relatedly, I was very sensitive to the notion of paying $25 for software and my customers were not. And I could put up with a little frustration and ease-of-use niggles to get a deal and my customers viscerally hate that. P.S. I can't decide which is worse, selling to price-sensitive customers or playing price-chicken with someone whose product is free.]

patio11 16y ago
Might as well show you, since it is semi-relevant: I started to make my product after an acquaintance of mine wanted a particular activity for class. I told her to Google it. She told me that this was the printed output from the #1 result. http://images1.bingocardcreator.com/blog-images/hn/free-competitors-rock.png http://images1.bingocardcreator.com/blog-images/hn/free-comp... Can you see a woman with a graduate degree feeling effing fantastic about herself for printing that out and giving it to a third grader? Just because it doesn't cost any money doesn't mean it is free. Postscript: that competitor is still in the top 3 for a few related search terms. They run AdSense ads. For me. And they perform the best anywhere on the Internet.
- newsisan 16y ago
  Sorry just wondering if you could expand a little on this paragraph: They run AdSense ads. For me. And they perform the best anywhere on the Internet.
  - wlievens 16y ago
    I think he means that his competitors run AdSense, showing for keywords that he bids on, so in effect they're just channelling part of their traffic to him. Since it's a competitor, there's a great efficiency in the traffic since the people are actually looking for his product.
    - newsisan 16y ago
      Oh okay, as in they are an AdSense partner - ie they have ads on their website?

rstocker99 16y ago

How often have you picked one product over another because of a key difference between them besides price? Price is an important difference but not the only one and not the most important one for all people all of the time. Be different on something besides price and move on. Before heading down the freemium path be sure to take the time upfront to build two bottom up revenue plans. One plan for freemium and one for strictly paying customers. Be sure and include a detailed breakdown of each of the channels you'll be using to acquire customers and their costs. It's ok to make educated guesses here. It can be quite painful so see how many customer you'll need with freemium before you reach your revenue goal and what it will cost to get them vs. just charging. Are you sure you're setup for that? Does it make sense given the size of your market? Given the likely customer acquisition channels available to you and their costs. Does it work with your budget? Not everyone is Facebook.

parfe 16y ago

3/10 cent a gallon for water delivered straight to the home. $1.50 gallon for a jug in isle 13 at your super market or $1.75 for a 20oz bottle at the checkout counter. Are these all the same product? Do they even compete?

patio11 16y ago
That example is going in my playbook. (And the product is available for free, in nigh-infinite quantities, in every occupied building in America. You don't even have to ask for it. In fact, asking for permission to take some would have whomever you asked immediately question your mental state!)
sgoraya 16y ago
There is an interesting book by Adrian Slywotzky, The Art of Profitability, that goes over various profit models. I think the above example falls into 'Multi-Component' profit, in that the same product (water) is priced differently in different businesses (super market, convenience store, delivery); since customers behave differently in each purchasing situation you see the ability to price the product in various ways. Another example would be how Coke is priced (to restaurants, grocery stores, vending machine).