Resources or guides to software product pricing


4

We found product pricing to be the hardest part of launching our product. What resources or guides (online or offline) have you found useful in thinking about pricing your product?

I'm interested mainly in shipped software, not subscription or SAAS services.

Pricing Software Products

asked Oct 14 '09 at 22:24
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D Thrasher
894 points
Top agency to build award-winning mobile apps: Utility NYC

7 Answers


6

I've just written an eBook ('Don't just roll the dice: a usefully short guide to software pricing') that you might find interesting. You can download it here. It's free.

answered Oct 21 '09 at 00:55
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Neil Davidson
1,839 points
  • Awesome! That's just the sort of thing I was looking for. – D Thrasher 10 years ago
  • It's an awesome book. Good job. – The Dictator 10 years ago

5

The #1 error we all make the first time we price our product is too go too cheap. It's amazing how insecure we feel.

If you have direct competition, do not go for significantly cheaper. Dare to charge a comparable price and fight on quality and features (even if it's your version 1.0 or alpha).

Somehow, everytime, we keep making that same mistake. I don't know how to emphasize this enough.

In case of doubt, raise your prices.

answered Oct 15 '09 at 06:23
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Alain Raynaud
10,927 points
  • Underpricing is exactly my fear. It's much easier to cut prices than to raise them. – D Thrasher 10 years ago
  • Good point but what about if it's impossible to provide all features in version 1.0? Does it still fair to charge same amount? – The Dictator 10 years ago

2

A nice written by Joel Spolsky on this subject (especially from a programmer point of view ) - http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html Also as a long read I suggest "The Undercover Economist", it's not directly talking about pricing but it's got some good eye opening moments, especially on the subject of relationship between scarcity power and pricing.

answered Oct 15 '09 at 02:05
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The Dictator
2,305 points
  • I'd forgotten about the Joel on Software article. Excellent suggestion. I'll have to check out the book, too. – D Thrasher 10 years ago

2

Remember that if your prices are too high you can always use tricks to "lower" it, like offering time-based discounts, affiliate programs, coupons, etc..

Then people feel they're getting a deal -- some will buy because of it -- and others will pay full boat anyway.

I agree with Alain that we tend to under-price (+1 to you my friend), but note that our v1.0 products are full of crap and probably need to be cheaper. As we improve the product and raise the price it works, but some of that might be the better v2 or v3.

answered Oct 15 '09 at 13:21
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Jason
16,231 points
  • +1 to v1.0 need to be cheaper. – The Dictator 10 years ago

1

One of your best guides will be your competition. If there's no direct competition, then try to place your product on a similar competitive landscape.

You may be able to simplify as well: if they're doing server+user+whatever licensing, perhaps you can do just user. But it should all come in at a similar price point.

Too low, and you'll come across as inferior.

answered Oct 14 '09 at 22:51
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Alex Papadimoulis
5,901 points

1
answered Oct 15 '09 at 13:19
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Jason
16,231 points
  • I really like Eric Sink's writings about the Business of Software. I'll have to re-read that article! – D Thrasher 10 years ago

1

You might find alot of useful information here: http://www.softwarepricing.com/

answered Oct 15 '09 at 14:37
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Vineet
1,080 points
  • Great link. I'll have to investigate that site a bit more. – D Thrasher 10 years ago

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