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How to raise prices?

Just finished reading Eric's article on pricing.

I'm wondering how easy it is to play around with the pricing? How to raise the price? How to justify the move? How to answer all the moaning, groaning and whining?

Sunday, August 8, 2004

Time the increment to match a major upgrade?

Keep the original price for the low-medium slot product, and add a new price for the enterprice/high cost product?

Like the article says, you'll ALWAYS have whiners; listen for a bit, and when they don't let up, ignore them. They'll whine no matter what you do.

Sunday, August 8, 2004

Second that. Bury the price rise in other news.

Introduce a stripped-down "XYZ-Lite" product at a lower price. Just enough to get them going and hopefully wind up wanting more.  Make sure it won't  eat your other sales.

Raise the price on the original product with some items added from the wishlist and a new look. This is your bread-and-butter product doing enough of everything for the vast bulk of buyers. 

Introduce a top-of-the line status product for the braggers.
Give them something to brag about - the price, and a totally unique feature whatever that may be.

Think Standard/Professional/Enterprise. Others have.

(aside)  I'll be delighted when debating price levels with clients becomes a serious issue for me, meanwhile reading Eric's postings on how-to-ISV is becoming addictive.

Monday, August 9, 2004

Fog Creek managed to do it. Did anyone take notes? They dropped their mid-level line, so everyone buying CityDesk was buying their top of the line version.

There was a window where you could buy the 1.x mid level version at the lower price, and you would upgrade to the 2.x version for free.

The 3.x version may or may not be a free upgrade, either everyone has to pay for it (existing customers will have to want the new features enough to spend the money again), or none of the existing customers will (not enough new features have been implemented to justify asking you to pay again).

It may not be the perfect way to do it, but it can provide a straw man for you to pick apart if you so choose.
Monday, August 9, 2004

Seen two small companies I've worked for go under because the owners weren't willing or able to raise prices enough to support current customers and have enough money left over to support developing new generation products.

So eventually the old products (although quite good) were so old-fashioned they began to lose customers and lost so much revenue the companies couldn't function.

One was sold at fire-sale price, the other closed down.

dot for this one
Monday, August 9, 2004

Asking a bunch of geeks what is certainly a business question probably isn't a great idea. Although a couple of folks here have businesses and are business minded, most of them think all management does is play golf all day and have no clue about a business is run.

Go find a forum that caters to folks that run a business and you'll probably get a more enlightened response.

Monday, August 9, 2004

Or you could, you know.. actually increase the value of your product in a meaningful way that justifies the price increase, instead of subscribing to the Microsoft School of Gouging.

But hey, that's just me.

Monday, August 9, 2004

"But hey, that's just me."

Muppet, the arrogant cynical know-it-all act is getting a little old. Why do I suspect that you're an extraordinary loser in real life?

Monday, August 9, 2004

Because you're jealous of the fact that I speak my mind without all the censorship and nicety of our pseudo-polite society?  I can't help that you're all backed up.

I'm doing quite well, but thank you for the concern.

Monday, August 9, 2004

The reality of it all is that I'm just an extraordinary prick who compensates for my lack of experience, knowledege and happiness by masquerading as an expert in all things.

Just ignore me, really. I'm just a pompous blowhard in real life and I live in my mom's basement.

Monday, August 9, 2004

Actually I've never claimed to be an expert in anything at all.  I live on my own and have since I was 17, I have a beautiful daughter who is probably more well behaved, polite, and intelligent than any spawn of yours, present or future.  I'm engaged to a beautiful and intelligent RN BSN, and things are going pretty hunky dory.  Sorry you can't pigeon hole me into some loser category.  I know how badly you want to.

Monday, August 9, 2004

Nah wrote:
>>Go find a forum that caters to folks that run a business

Like what?  This forum is the best (on the web) I know for running a software business.  Most people elsewhere are really closemouthed about it. 

Ethan Herdrick
Monday, August 9, 2004

Sorry, my Tourets is acting up again. It makes me inclined to say silly things like my life is fine.

Mom's calling me. Gotta go.

Monday, August 9, 2004

Here's another example of a software product whose prices jumped:

I purchased the 6.x version for around $30... all 12 or 24 or whatever products (I only use a handful of them). Now each one is priced at around $30 and the whole package is around $120.

They've been slowly adding "features" for a while, and I really like the 12backup / secondfolder product. I think you used to be able to get each for around $5 individually.

I have no idea what their sales figure are like before/after the price increase, and they added no features. I was able to talk to them and download the last 6.x version, but they won't offer an upgrade to the 7.x version, even though there's very little new in it.

I thought their marketing strategy was brilliant before... Sort of a kitchen sink kind of thing "well, I don't need all of these things, but hey, they're only about $1 each, so why not? I want a few of them and it would cost half that much for them anyway."

Now I don't know what to think of their pricing. 12backup is priced about the same as SecondCopy, and $120 is a lot to pay for a bunch of stuff you don't even really want.

Whether or not they lost 75% of their potential customers (and therefore make the same money as when they charged 75% less) I don't know.

Another similar deal is the PC Magazine tools, which used to be free, but now require some sort of low cost subscription... $5 for 3 downloads or something. Of course, they weren't making any money from them before, so I guess charging a little isn't a bad thing for them.

I don't know if any of this helps.
Monday, August 9, 2004

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