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Do not talk about pricing

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Re: Do not talk about pricing

#141

Post by dsr_ »

beat wrote: post #135

So those of you who make purchase decisions for software used in-house... what are your turn-ons and turn-offs? If I'm trying to sell you a product that you find technically useful and exciting, how does pricing play into it? What would drive you away from a buy decision on an otherwise great product?

For the most part, you need to represent value far in excess of the total lifetime cost, which includes half of the transition cost to the replacement.

Say your software is licensed at $10 per person using it per year. In addition to the $10, I need to consider the costs of installation, configuration, first level support, entitlement/license management, and what it will cost me to extract the data and munge it into a usable form when we decide in three years that your competitor does it better.

Now consider that most companies offer lousy support for their products, so I also have to do a test roll-out to a small number of people, manage that, and figure out if it will all be worthwhile.

If you discount based on quantity, can I roll the test group into the main group? If you price in chunks larger than per-user, do I fall between your levels in some disadvantageous way?

Is it any wonder that I vastly prefer standard-protocol based, open-source applications with healthy user communities? No, it is not.

Re: Do not talk about pricing

#142

Post by restalis »

sosborn wrote: post #62
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

Well, that's a bit apples to oranges. You don't have many options for sending shit into space.

But there can be! Say, they entice customers to bid into a collective launch and then scheme you into all kind of price conditions depending on your load, service priority, or whatnot.

...actually, the more I think about it, this may be a business idea in itself, for the poor suckers who don't afford a solitary launch!

Re: Do not talk about pricing

#143

Post by rdl »

zodPod wrote: post #123
nitwit005 wrote: post #27

If you try to buy things, it's sometimes desperately frustrating that no one will just quote you a simple price. They have different pricing tiers, and want a salesperson to talk to you so they can pretend to give you a "special" discount, and all sorts of BS. I'm sure these things work, but they also alienate customers sometimes. People have founded entire businesses on offering clearer pricing schemes.

THIS. When I go to a website that doesn't have prices listed and you have to "Call for a Quote" I move on. I know the prices are going to be garbage and it's not worth my time to deal with the idiots on the other end trying to scheme me into spending money with their company.

I'm ok with a mix of transparent and bespoke pricing -- it sucks to see 3 options with set prices, where you actually need something different and are willing to pay.

The ideal is some kind of pricing calculator, though. 3 packages and a custom quote generator, or "call".

Re: Do not talk about pricing

#144

Post by stronglikedan »

brookside wrote: post #138
stronglikedan wrote: post #136

Earlier quoted context omitted.

I've had people come out to my house and quote me on a project. I've then called them back and told them that it was out of my budget, to which they've then quoted me a cheaper price, hoping that it's within my budget. I've then told them that they should have given me their best price from the start, and I can no longer trust them, because they've already lied to me once. This happens more often than not, and I usua…

Somebody revising a quote doesn't mean they were lying the first time around. You may not care for negotiation, but that doesn't mean it is dishonest. Items and services don't have a "real" price, they are only worth what people will pay for them.

As I said, I do understand that. However (and I should have noted this in my original comment), I always tell them up front that I don't like to haggle, and would like their best possible price up front. I also tell them that I am comparing it with at least two other vendors (I always get at least three estimates). Therefore, when they do reduce it, they were lying the first time.

I am always very honest with them, and expect the same. Heck, I don't even hesitate to pay them when they screw something up. I pay them promptly, and then hope they will do the right thing.

While items and services don't have a "real" price, they do have a "best" price.

EDIT: I'd also like to add that, while the article focuses on consumer pricing, I am different when it comes to B2B pricing. E.g. I would quote a successful law firm more than a mom-and-pop shop for consulting services. Back when I was an entrepreneur, I actually lost a couple of contracts because my quotes were too low.

Re: Do not talk about pricing

#145

Post by st3v3r »

rgbrenner wrote: post #140
cstejerean wrote: post #106

Earlier quoted context omitted.

The price for a Tesla including all options is easily available on the website. You don't have to contact a sales person to find out the price. I have no idea about Solar City.

well here's their website: http://www.solarcity.com/ you have to schedule a consultation if you want prices.

I imagine that's because there are more variables with a solar installation than with a car that has clearly defined options.

Re: Do not talk about pricing

#146

Post by alphydan »

rgbrenner wrote: post #140
cstejerean wrote: post #106

Earlier quoted context omitted.

The price for a Tesla including all options is easily available on the website. You don't have to contact a sales person to find out the price. I have no idea about Solar City.

well here's their website: http://www.solarcity.com/ you have to schedule a consultation if you want prices.

Pricing for solar panels is quite complex. The price will mostly involve:

- The state of the roof (does it need reinforcing? will the installers need scaffolding?) - The complexity of the installation (lots of little roof sections with earth tiles and 2 or 3 transformers? Or a plain and simple one-transformer south facing asphalt roof?) - Does the crew need to drive 5h from headquarters? Or just 1h? - A 3kW installation may be worthwhile in some locations but not in others.

And finally since solar city depends on the performance of the panels (which they sell as debt), they must ensure that your house will be a good candidate. If it's not, they don't want you as a customer.

Re: Do not talk about pricing

#147

Post by beat »

dsr_ wrote: post #141
beat wrote: post #135

So those of you who make purchase decisions for software used in-house... what are your turn-ons and turn-offs? If I'm trying to sell you a product that you find technically useful and exciting, how does pricing play into it? What would drive you away from a buy decision on an otherwise great product?

For the most part, you need to represent value far in excess of the total lifetime cost, which includes half of the transition cost to the replacement. Say your software is licensed at $10 per person using it per year. In addition to the $10, I need to consider the costs of installation, configuration, first level support, entitlement/license management, and what it will cost me to extract the data and munge it into…

It's software that automates a lot of costly auditing and troubleshooting in complex systems, so the core value proposition is hours that humans don't spend (and reduced downtime). If it can reduce the workload of senior/lead engineers by 5-10%, what's that worth? This sort of thing is really hard to quantify, although I'm sure we'll get more data as it grows.

Does per-seat licensing work best, or something modeling the amount of data being processed? Fixed or floating seats? We're definitely looking at higher pricing, from hundreds to a few thousand per seat annually (not unusual in the market). I'm not worried about whether the product will be loved - we're engineers ourselves, totally focused on the suckiest parts of working on enterprise systems. If our product isn't a pleasure to use, I'll take it as a personal failure. But then we have to sell it. And I'm an engineer solving my own pain points, not a sales guy. That part is new to me!

Re: Do not talk about pricing

#148

Post by restalis »

beat wrote: post #133
wesd wrote: post #122

Earlier quoted context omitted.

What's the good reason? Is it because the pricing strategy is charge as much as the customer is willing to pay?

Pricing for the enterprise can be an incredibly complex thing. License management as well. I used to work for a company that provided custom pricing software for highly complex products (did you know a semi truck can have over 4000 options?). They charged hundreds of thousands for a custom pricing software solution - but it was mostly a custom job, some off-the-shelf software but mostly a ton of customization for tha…

That's not "pricing for the enterprise" you're describing, it's pricing for customizations. Yes, each customization can be negotiated separately and when there can be "over 4000 options" it makes sense to not display them all but to guide the client through. This may be a case where complexity may warrant private interaction (or at least it used to be that way as nowadays the entire array of option complexity can be left to be sorted out with a software application).

Re: Do not talk about pricing

#150

Post by Benjammer »

zodPod wrote: post #128
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…

Seriously! Think about how we deal with Android/iPhone apps. I go to Five Below or a Dollar Store and stock up on $2-$3 items that are kind of neat even venturing into the $5 range occasionally for "premium garbage" yet I get on the Google Play store and see a really awesome app that fills one of my needs but it's $2! How can someone charge $2 for THAT? They only spent a year working on it and it fits my need perfect…

There is something to be said though about being able to see, touch, and feel that $3 tchotchke in the store rather than downloading an app with no idea of it's depth or quality (unless there is a brand reputation already).

I think there's something primal about touching/seeing something before buying, and I haven't seen anything digital that even comes close to this sense of grokking the whole thing you're buying in a few seconds/a minute of physical inspection.

I'm curious what the difference is (if any) in effect of the GBB pricing model in a store front versus online marketplace.

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