5 ms·
How To Price Software Without Just Rolling The Dice
- tptacek 17y agoYou probably get 80% of the value of all these posts with just two bits of pricing advice: * Don't charge cost-based prices; what you pay to build something has nothing whatsoever at all to do with your price. All arguments of the form "that's just a (wiki|blog|bug tracker|reddit clone) with a * attached" are themselves a subtle form of cost-based pricing. * Charge more. I liked the book though.
- access_denied 17y agoAdditionally, if you do b2b: * Charge more.
- tptacek 17y agoAlso, at rev 2.0: * Charge more.
- pchristensen 17y agoIn a recent Stack Overflow podcast (73?) Joel said that he would helped the world a lot better if he made a robot that you could ask about software pricing, and it spat out the answer "Raise your price by $200"
- pkaler 17y agoIt was the This Week In Startups podcast with Matt Mullenweg as a guest.
- pchristensen 17y agoThat's it - too many podcasts to keep straight. Thanks!
- tomjen2 17y agoOf cause: that way, nobody buys your software and he can ignore a competitor.
- tomjen2 17y agoIt is true, that you shouldn't try to go into cost based pricing. But you should try to force whomever you deal with to accept a cost based payment - after all, you want as low a price as possible.
- mixmax 17y agoI think there's a better way if you're doing webapps. Since you can change the price for each customer in the backend code you can actually start doing statistics and find out at which pricepoint you maximise your profit. More info here: http://www.maximise.dk/blog/2009/01/getting-product-pricing-right.html http://www.maximise.dk/blog/2009/01/getting-product-pricing-... (Full disclosure: it's my own rarely updated blog)
- sheena 17y agoIt might be a better way in theory, but do you know of anyone who's actually employed the technique without severely alienating customers? You mention Amazon as a general A/B tester, but Amazon's price testing is the most prominent example I can think of and it ended with a public apology. Price discrimination (even if it's only a testing phase) only seems to fly if it's not obvious, and it'd be obvious for most webapps.
- pierrefar 17y agoAs I understand it, airlines can get down to a per-seat pricing structure. Look how much we love them for it. There is a reason why Farecast did so well...
- sheena 17y agoTrue. I didn't mean that some markets don't support price discrimination, just that customers' perception of it -- if they know it's going on -- is terrible. With airline tickets, people see prices fluctuating over time: lots of bumps but also some apparent connection between the time/effort involved with buying early and a generally better price. Customers seem to be more infuriated if they can easily tell that someone else is getting a better price on the same exact seat at the same exact time. Given the fluctuations and the expectation of fluctuations in airline pricing, there's not much direct comparison going on among airline ticket consumers.