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Revisiting high school economics, making your price and value hew to each other as closely as possible is called extracting consumer surplus. Your customers ar
by hapless 18y ago
Revisiting high school economics, making your price and value hew to each other as closely as possible is called extracting consumer surplus.
Your customers are not stupid. It's already difficult to get a pilot project implemented. When they see that the 501st user is going to cost them 50% more than the 500th, the pitch will go in the circular file. No number of clever graphs will justify your price to the customer. Humans are finely tuned to reject "unfair" proposals in negotiations, no matter how big a net win they are for both parties.
This is a good pricing model, just not one you can ever show to your customers. You would need an Oracle-esque sales force to feel out the customer and generate tremendously complex sales quotes.