Hey Silicon Beach I found this great post which provokes a few thoughts/opinions on the discussion of how to price Enterprise/Business web software and SaaS.
How to price software/saas - http://network.businessofsoftware.org/forum/topics/how-to-price-softwaresaas<http://network.businessofsoftware.org/forum/topics/how-to-price-softwaresaas> We are currently working through and optimising our pricing models for BuzzNumbers atm so this seems like an interesting discussion that we would be interested in advice on. In my own mind its interesting to compare the different sales and pricing models for companies like: - salesforce - atlassian - sap - basecamp - hitwise All very different models, all successful businesses. For BuzzNumbers we are thinking through the pros and cons of - enterprise licensing (per seat, per client, data volume/usage charge) - subscription hosted service charge by either keyword, data, matches, company, brand, clients, project etc etc - reseller sales and licencing considerations Does anyone have any additional thoughts on the below blog post or our own scenario? Cheers Nick ---------------------------------- How to price software/saas - http://network.businessofsoftware.org/forum/topics/how-to-price-softwaresaas<http://network.businessofsoftware.org/forum/topics/how-to-price-softwaresaas> Does anyone have any valuable insights into how to price software? I've done a bit of reading around but at the end of the day it still seems more guess work than science. Love to hear any insights, personal experiences etc. For us in particular, we have three software complimentary products as part of a single platform targeting user interface designers so it's about setting more than just "one price". But there are obvious questions such as: - What type of "free" do you offer? Fremium, free for 30 days, free loss leading product... - How do you do bundling? - What type of a "message" are you sending with your price levels? - If your customer is not using their own money (but needs to get permission to buy the software), how does that change the price? (ie, if you're asking for $50, you might as well as for $100 because it's the same hassle for them) - Do you look to the market to price (external input) or do you primarily look internally (we think it's worth xyz and adds $x value therefore..)? -------------------------------------------------------------------------------- When it comes to pricing, only external factors count. Take a look at competing products or alternative solutions and calculate the full pricing of their offering for your target groups. In most cases you will come up with a pricing range. If your product does not radically differ from other offerings in the market, which would give you the choice of having a disruptively low price or premium price based on added value and scarcity power, aim for a percentile in the pricing range that equals your percentile when it comes to the product offering. --------------------------------------------------------------------------------- First, I would look at competitor pricing to get an idea of what range might work. Second, I would consider the value your solution offers to the customer. If they can save $1000 with the software you can't charge $10,000 for it but could easily charge $500. Third, I'd consider how your price affects perception. If I offered you a Rolex for $10 you'd value it a whole lot less than a real one at full price. However, the expensive Rolex is only prized because it is artificially expensive. Lastly, there is a gap in software pricing between $999 and $5000 to $10,000. Most companies allow purchased under $1000 to be authorized by mid level managers or charged directly on credit cards. Above $1000 you need more approval. This leads to a pricing gap because the effort involved in selling the solution to the higher ups is much greater. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
