7. Pricing Checklist

1. Product Pricing
2. Some Economics
3. Pricing Psychology
4. Pricing Pitfalls
5. Advanced Pricing
6. What a Price Says
7. Pricing Checklist
8. Bibliography & Credits

Wrapping up, here’s a checklist to help you decide your pricing:

What’s your strategy?

Are you going to price low and sell lots, or price high and sell a few? How does this fit into your brand, the product you have and the image you want to project?

What’s your product?

Don’t forget that it’s not just the software that you’re selling. It’s the entire package around it.

How will your customers judge the fairness of your pricing?

What reference points will they use? How will they determine what seems right? Will they baulk at the price you choose, or will they accept it?

Who are your customers?

How does their business work, and how do they expect to be charged? How much money do they have? Do they prefer a one-off fee, or a monthly subscription? Get under their skin.

Who are your competitors?

How will they react to your pricing? How much more, or less, valuable is your product than theirs? What is their business model? What are their prices? If you undercut them, will you trigger a price war? If you do, are your pockets deep enough for you to win it? Do you want to co-exist with your competitors, or destroy them?

How are you going to sell your software?

Do you need to send out sales people to take customers golfing? Or are you planning low-touch sales over the internet? Will you require a telesales team? How much will each sale cost you? Do you need to sell via a channel or reseller? What cut will they take?

Can you segment your customers, and create versions?

Is your software worth different amounts to different people, and can you create pricing that reflects that? Students and business people for example, or normal and power users, or maybe you can split by geography or taste.

How can you bundle your software?

Can you create a larger package that contains more than one software product?

Make an informed guess at your price

Despite all the psychology and economics, you ultimately just have to pick a price. Some price – any price – is better than no price.

Try it out

Practice trumps theory. Try out your pricing and see what happens. If you’ve got your pricing broadly right – and if you’ve got this far you should do – then you can tweak it later.