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Do not talk about pricing

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Re: Do not talk about pricing

#91

Post by 50CNT »

corysama wrote: post #48
lucaspiller wrote: post #32

Earlier quoted context omitted.

I'm the same and it doesn't really make any sense. Ok food is physical and tasty, but you enjoy it for maybe 15 minutes vs a game that could provide 100s of hours of entertainment?

The difference is uncertainty. With pizza, you know pretty well what you are going to get. With an app, 90% are crap, 9% are ok but not what you personally prefer, 1% are great. So, gambling $2 with a seemingly 1% chance of greatness feels like an app costs $200. The reality is not that bad. But, it's all about how it feels. On top of that, it's not even really about the money. You don't want to feel bad about gettin…

And that's exactly why guarantees are so effective for sellers. It takes that risk off the customers shoulder, and due to the "Oh, it'd be embarrassing to refund this app, since that means I made a mistake", very few people actually go through with the guarantee.

One pitch I found pretty neat goes roughly as follows.

Buy now, and if within (30|90|365) days you at any point feel unsatisfied with it, feel free to ask for full refund, no questions asked, and you get to keep our , valued X$, as a gift from us for trying it out.

Short breakdown of it.

    "Buy  now" - bog standard call to action  
    "(30|90|365) days" - if the product is any good, longer guarantees usually reduce returns, since they give more time to grow on the product and forget the guarantee date. 
    "feel unsatisfied" - eg. you don't even need a reason to return it 
    "full refund" - that's pretty d'uh now, try a 110% refund for extra excitement 
    "no questions asked" - eg. we're not going to hassle you for trying to use this. you will not feel stupid. 
    "get to keep " - even if you opt out, you get something
    "valued X$" - with a home made infoproduct, that value is pulled straight from the posterior, but gives a value anchor
And suddenly that 3000$ product seems less risky than a 2$ app.

Re: Do not talk about pricing

#92

Post by bottled_poe »

wildmusings wrote: post #13
ipsin wrote: post #3

Earlier quoted context omitted.

For me, the thing is that you're buying one beer for $7 one time, not "beer in perpetuity, or until you remember to change your mind".

You make a good point but I don't think this is the main dynamic at play. I'm much more hesitant to buy a $5 app, a one-time purchase, than a $7 beer.

Maybe that's because most apps are garbage.

Re: Do not talk about pricing

#93

Post by [deleted] »

J_Darnley wrote: post #83
desdiv wrote: post #30

Earlier quoted context omitted.

It's a funny world when Elon Musk will openly display "$90M to send 6.4mT of your shit into geosynchronous orbit"[0] and yet millions of businesses selling things that are far less expensive and far more fungible want you to "contact our sales team for a quote". [0] http://www.spacex.com/about/capabilities

> mT Is that millitonnes, more commonly known as kilograms?

[deleted]

Re: Do not talk about pricing

#95

Post by RodericDay »

ipsin wrote: post #3
josephjrobison wrote: post #2

The most surprising thing I learned from this is that even juxtaposing two options will help you get higher pricing. When thinking of product and service pricing, for me it's difficult to invent three different options sometimes, so it's relieving to know that I could create just two and it will get me most of the way there. It is also crazy to think how relational it all is. I don't really need that extra $7 beer at…

For me, the thing is that you're buying one beer for $7 one time, not "beer in perpetuity, or until you remember to change your mind".

Would be cool if some services allowed you to sign up for one month at a time, with a renewal-by-single-click close to the end of each expiry period, kind of exactly like ordering beers one at a time until you're done.

Re: Do not talk about pricing

#96

Post by lisivka »

J_Darnley wrote: post #83
desdiv wrote: post #30

Earlier quoted context omitted.

It's a funny world when Elon Musk will openly display "$90M to send 6.4mT of your shit into geosynchronous orbit"[0] and yet millions of businesses selling things that are far less expensive and far more fungible want you to "contact our sales team for a quote". [0] http://www.spacex.com/about/capabilities

> mT Is that millitonnes, more commonly known as kilograms?

It is milli-teslas.

https://en.wikipedia.org/wiki/Tesla_%28unit%29

Re: Do not talk about pricing

#97

Post by skylark »

Nimitz14 wrote: post #54
ipsin wrote: post #3

Earlier quoted context omitted.

For me, the thing is that you're buying one beer for $7 one time, not "beer in perpetuity, or until you remember to change your mind".

But you're also getting something for it in perpetuity. People, I find, are simply irrational when it comes to monthly subscriptions. I'm a student with <1000E income and a monthly cost <20E doesn't even register; as long as I get something from it I want. If it's not big enough to induce a lifestyle change, what's the problem? So often I see people use Spotify and complain about the commercials, and I'm just like 'W…

Let's turn it around. If you invest 120 dollars into your retirement fund every year for the next 40 years, you'll end up with 33.5k. Instead, you spent 4.8k. The person who listened to a few commercials is up 40k on you at retirement.

This is an extreme example (after all, you're not going to spend 10 dollars on Spotify for the rest of your life), but the principle of the matter stands: Money saved now will be worth more later thanks to compounding interest. In a sense, the dollars you earn today are the most valuable dollars you'll ever earn.

It's up to you to make the judgment call on a case by case basis whether you'd like to live in the moment, or whether you'd prefer to save. Everybody draws the line somewhere (I personally have a Spotify subscription), but to call it irrational is... a bit irrational.

Re: Do not talk about pricing

#98

Post by geon »

bpchaps wrote: post #66
tajen wrote: post #53

Earlier quoted context omitted.

I would argue that IBM's business is selling golf courses and Orlando software-and-wine conferences to CEOs, for having witnessed it, because honestly, which sysadmin would accept to run such horrible pieces of software (IBM Rational Suite or IBM FileNet), let alone... pay for it, really? It looks like nothing more than corruption of officers on fiduciary duty. Secret pricing is exactly how they conduct that business…

Other smaller companies act like this, too. Was invited to a steak lunch for automic's UC4 (job scheduling) at a fancy dinner far away from anything relevant and at no point, during a two hour talk, was anything of substance actually said. They were trying to sell us UC4 (we already owned it, ffs) yet they didn't even show us the damn interface! Everything was fluff upon fluff upon fluff. And the execs - wearing some…

They use a large, expensive platform for automation, and they don't know how to automate?

Re: Do not talk about pricing

#99

Post by FussyZeus »

cromulent wrote: post #51
FussyZeus wrote: post #37

How about instead of anchoring or negotiating or special discounts or sales or any of this nonsense, we have a simple agreement: I, a customer, will give you money for a product/service, and you deliver that product/service as described with no conditions, strings, or other such insulting attachments and we call it a freaking day? When did commerce get so bloody hard?

Totally agree, but I think haggling and anchoring have been around for a very long time, at least as long as markets. I don't see them going away any time soon.

I would say haggling is similar but fundamentally different, that's more between a customer and a salesperson and usually involves more or less them on equal footing (the example that comes to mind first is a car, and the old saying that no one but a sucker pays sticker price). That's a luxury good where the need isn't immediate and the customer can exert some influence, unlike the vast majority of sales situations where the need is apparent and they can't just go to the 'next lot' whatever that might be.
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