

How to Price Software - Economics vs. Pyschology - mv1
http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html

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davidedicillo
Great read if you are in the business of making money. Since we launched
SyncPad, pricing (for enterprises) has been the most difficult thing to
decide.

One thing not mentioned is that, even before pricing, is important to define
what are you charging for. While in some cases it's easy (Photoshop charge per
seat), in other it isn't because there are several variables in the
application usage. In our case there are several thing we can charge for:
users, concurrent users, concurrent rooms, and length of the meeting. Focusing
your pricing on one thing instead of the other could radically change the
amount of revenues as well as the perception users have about the price.

~~~
Roboprog
What you are selling? Indeed. If you are selling to large businesses, you are
to _some_ extent selling checklist functionality (even if the UI /
responsiveness / workflow is an instrument of torture to the poor dumb
bastards having to use your Enterprise nightmare), AND (!!!) absolution of
responsibility.

You are selling reputation, support, and a willingness to hold the customer's
hand in the middle of the night, and possibly anywhere in the world. You are
selling the assurance that your product is safe and reliable, and that
selecting your competitor's product would be madness, folly & death, leaving
your client out of a job, and his children disgraced and homeless.

This also contributes to the $75K entry level price tag for business software
that Joel mentioned. It doesn't all go to "sales porn" -- some of it has to go
into at least the appearance of support.

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Killah911
While it didn't spoon feed pearls of wisdom as on pricing strategies, it was a
fun read, and at the end I was saying something to the effect of... ditto!
Pricing's more of an art, as are many things when it comes to running your own
shop. Hindsight is always 20/20 and I'm sure for every art, someone's written
a book on the scientific approach to it. Ultimately, think, decide & accept
your decision. Learn from the past & be happy in knowing that at least you
decided for yourself, and then look to the future with optimism!

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statictype
An oldie (but goodie) that has been referenced many times on HN. Probably one
of Joel's best pieces.

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rmccue
Regarding the sneaker example, this is an example of a Veblen good, which are
bought specifically for the status given to the brand or product:

<http://en.wikipedia.org/wiki/Veblen_good>

(There's also Giffen goods, which are similar, but where the lower priced
product is inferior. This means that consumers will substitute the product for
another if they have the money to do so.)

