Pricing
 

Pricing

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These are the seven forces to factor into your Pricing decisions - whether it's for web products or professional services.

These are the seven forces to factor into your Pricing decisions - whether it's for web products or professional services.

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Pricing Pricing Presentation Transcript

  • PRICING 7 forces to factor into your thinking
  • There are 30-40 pricing experts on the planet. I’m not one of them. My name is Chris Lema and I’ve been building hosted web-based software (SaaS) since 1994. Whenitcomestopricing,I’ve justmadelotsofmistakes.
  • It’s not just about Price. It’s about environmental scanning, business modeling & sustainability. 1
  • It’s not about Demand Curves. You need too many prices. You need to offer them too long. You need no one else to know. 2
  • Mass is not a business model. Price products so that every product or service sale makes sense. 3
  • The 7 Pricing Forces 4
  • First, understand the Players in the Market Don’t say you have no competition. You just sound naïve or silly. 5
  • Second, understand Your Prospects Knowing their pain and the benefits of solving those pains helps you know how to set your price. 6
  • Third, understand Your Positioning You only have three choices – cheap, competitive, or classy. 7
  • Fourth, understand Your Profit Margin Know what your “floor” is, so you can decide if you need to change other parts of your model. 8
  • Fifth, understand Your Product Strategy Will you sell add-ons? Will your product have a network effect? 9
  • Sixth, understand Pricing Psychology Learn what says “premium” and what says “discount” and leverage it. 10
  • Seventh, evaluate any Problems with Pricing Sometimes the price isn’t what’s wrong and lowering prices won’t help you. 11
  • Special Cases with Pricing •  Calculating Hourly Rates •  Project-based Pricing •  Scope Creep •  Premium Segments 12
  • Questions?