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How I doubled the price of my software product and sold ten times as many copies

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Re: How I doubled the price of my software product and sold ten times as many copies

#31

Post by pbreit »

damonpace wrote: post #21

Ask yourself this question? Would you hire a lawyer that charges $9.99/hr or one that charges $299/hour? The higher the price the more "Perceived" value it holds. Pricing strategy is an important part of bringing a product to market. Then there is pricing optimization that needs to take place to find the perfect mix of profits and revenue. Luckily for us techies we can iterate as much as possible to find the right mi…

If I got the same value, I would definitely take the 9.99/hr one. LegalZoom is IPOing because I'm not the only one.

But of course we all know that when you pay $300/hour for legal services, you are paying for insurance, not the actual service.

Re: How I doubled the price of my software product and sold ten times as many copies

#32

Post by pbreit »

lawfulfalafel wrote: post #20

Can someone who has experimented with re-pricing their product explain the legality of it? I mean can you offer different prices to different customers at the same time? Or do you have to globally shift your pricing? Also, where would you look up the laws for stuff like this?

There's nothing legally wrong with changing your product's price. If it were a subscription product, you may run into trouble. Also if you were advertising the old price, you might run into bait-and-switch laws.

Re: How I doubled the price of my software product and sold ten times as many copies

#34

Post by badkins »

Does anyone have any thoughts or experience with testing the "bargain-bin" hypothesis with subscription based payments?

I can see a one time purchase of $10 for a piece of software as appearing cheap, and therefore low quality. But what about a $10/year charge, or $10/quarter.

Re: How I doubled the price of my software product and sold ten times as many copies

#35

Post by stayjin »

Am I the only one that cannot stomach the idea ( doctrine ) that one should sell his product as pricier as he can get away with or so that one maximizes revenue?

I can understand that when I don't have a clue about how much is my product value, I can probe the market for an optimal price setting, but... but then again I should not be clueless about my niche and my product costs, should I? If I have a concrete plan saying that I need to make 40% profit, why should I take 60%, even if someone is willing to give it to me?

Why can't I say "Well, thank you for your kind offer, but I value my work at this price, this is enough for me to make a decent living, with the extra money please go buy cookies for your kids or give it to charity or whatever."

I mean, I look at myself, making everyday choices about what I can afford and what not, I would like to buy a good quality thing if I can afford it, and the list is usually longer than my affordance... well, my customers are in the same situation like me, they definitely have one more thing they would love to buy with their budget if they can afford it, so why should I take advantage of the fact that they would pay more for mine, if I already make enough?

Like someone before said, does the author know why he was able to sell it at double price? Knowing who his target customers are, should he?

Re: How I doubled the price of my software product and sold ten times as many copies

#36

Post by nanijoe »

bennesvig wrote: post #28

This reminds me of my wedding photographer. She was just starting out and priced her services much lower than what she was worth. A few months later she bumped up her prices significantly and her business exploded. People viewed her lower prices as an indication of low quality despite a quality resume on file.

The situation is unique. Most of her clients have next to no experience with hiring or evaluating a Wedding Photographer, so price acts as a greater indication of quality than usual. IF AT&T doubled their pricing for SMS (for example), they would likely lose customers, because we all have a better way of evaluating quality than just price.

Re: How I doubled the price of my software product and sold ten times as many copies

#37

Post by sp332 »

stayjin wrote: post #35

Am I the only one that cannot stomach the idea ( doctrine ) that one should sell his product as pricier as he can get away with or so that one maximizes revenue? I can understand that when I don't have a clue about how much is my product value, I can probe the market for an optimal price setting, but... but then again I should not be clueless about my niche and my product costs, should I? If I have a concrete plan sa…

Sure, that's what's neat about a market. The customers wouldn't pay this price if they thought it was unfair. It's not like he has a monopoly, or there's any other pressure for the customers to buy his product. If the customers are getting more than $20 of value, then charging $20 is a fair price.

Also, over the long term, it could allow him to cash out or retire or whatever sooner, so the total amount of money he takes from other people over his lifetime might not go up as much as you'd think.

Re: How I doubled the price of my software product and sold ten times as many copies

#38

Post by drewcrawford »

stayjin wrote: post #35

Am I the only one that cannot stomach the idea ( doctrine ) that one should sell his product as pricier as he can get away with or so that one maximizes revenue? I can understand that when I don't have a clue about how much is my product value, I can probe the market for an optimal price setting, but... but then again I should not be clueless about my niche and my product costs, should I? If I have a concrete plan sa…

One doesn't have to spend income wastefully or with a focus on improving one's lifestyle.

You can hire another developer to bring more software into the world, you can donate it to charity, etc. Income is merely a "money option", it doesn't mean you have to exercise that option in any particular way.

Re: How I doubled the price of my software product and sold ten times as many copies

#39

Post by msencenb »

stayjin wrote: post #35

Am I the only one that cannot stomach the idea ( doctrine ) that one should sell his product as pricier as he can get away with or so that one maximizes revenue? I can understand that when I don't have a clue about how much is my product value, I can probe the market for an optimal price setting, but... but then again I should not be clueless about my niche and my product costs, should I? If I have a concrete plan sa…

"Am I the only one that cannot stomach the idea ( doctrine ) that one should sell his product as pricier as he can get away with or so that one maximizes revenue?"

There is a fine line here. In my mind a product should be priced relative to the value it creates for people. If this price point provides more money than one needs to sustain daily life then I think its a perk. Besides that if I make a product that is making more money than I need, that gives me more of an opportunity to do a lot of things. Anything from building better more awesome products to donating my time or money to charity.

Re: How I doubled the price of my software product and sold ten times as many copies

#40

Post by alanfalcon »

mootothemax wrote: post #22
Sukotto wrote: post #18

Possibly referring to http://tbbuck.com/building-a-web-application-that-makes-500-... Prices went from $9.99/month to $19.99/year to $19.99/ month The take home quote What difference did increasing the price 12-fold make? Colour me shocked, surprised and, frankly, happy: it made *zero* difference!

Thanks for the mention, but it's independent of me :) One aspect I didn't mention in my blog post is that I have a hard-core following of four people that email me once every few months complaining about the price. They complain that $9.99/month is too much, $19.99/YEAR is too much, and that I can't be making any sales at $19.99/month. In short: don't take pricing advice people who aren't giving you money :)

>> In short: don't take pricing advice people who aren't giving you money :)

I think that's the key to succeeding in business.

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