Pricing Isn’t Rocket Science --It Just Takes Some Work
and time
and teamwork
and judgment
and experience
and luck

233 Nee...
The Ethics of Garage-Sale Arbitrage
Is it ethical to buy something at a yard sale or flea market
at the seller’s asking pr...
The Ethics of Buying Software Licenses
Is it ethical to buy software from a software sales rep
at the seller’s asking pric...
Wrong Price
Right Price

Pricing That Works
Pricing That Works
Market
Stage

Target
Customer

Offering

Your
Economics

Value
Delivered
Pricing Works Better When You …
• Look Beyond Price Level
• Focus on Right Customer
• Manage Perception of Value
• Have Go...
Level

Look Beyond Price Level

Customer
Perception
Process
Level

Focus on Right Customer

Customer
Perception
Process
Level
Customer

Manage Perception of Value

Perception
Process

Economic Drivers
Revenue

Cost

Other Considerations
Imple...
Manage Perception of Risk
+ € 1,000
€0

- € 1,000

€0

€0

€ 1,000

- € 500

+ € 500

Expected
Value = € 500

Expected
Val...
Manage Perception of Value

• Loss aversion
• Anchor high

• Compromise
• Herd instinct
Manage Perception of Value

Technology  Value
“Technology means nothing unless it enables
a differentiated customer exper...
Level

Have Good Processes

Customer
Perception
Process
Have Good Processes

Bundles

Incentives

Deliverables
Amount

Metric

Incentives

Terms
Bundles

Deliverables

Terms

Del...
To-Do List
• Look Beyond Price Level
• Focus on Right Customer
• Manage Perception of Value
• Have Good Processes
To Help With Your To-Do List…
http://downloads.businessofsoftware.org/dontjustrollthedice.pdf
Thanks!
Jim Geisman
jimg@softwarepricing.com
+508 - 647 - 0330

233 Needham Street • Suite 300 • Newton, MA 02464 • (508) ...
Jim Geisman Pricing Isn’t Rocket Science - It Just Takes Some Work at Business of Software Conference 2013
Jim Geisman Pricing Isn’t Rocket Science - It Just Takes Some Work at Business of Software Conference 2013
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Jim Geisman Pricing Isn’t Rocket Science - It Just Takes Some Work at Business of Software Conference 2013

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Jim Geisman Pricing Isn’t Rocket Science - It Just Takes Some Work at Business of Software Conference 2013.

More information about Business of Software - www.BusinessofSoftware.org

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Jim Geisman Pricing Isn’t Rocket Science - It Just Takes Some Work at Business of Software Conference 2013

  1. 1. Pricing Isn’t Rocket Science --It Just Takes Some Work and time and teamwork and judgment and experience and luck 233 Needham Street • Suite 300 • Newton, MA 02464 • (508) 647-0330
  2. 2. The Ethics of Garage-Sale Arbitrage Is it ethical to buy something at a yard sale or flea market at the seller’s asking price, if you know the value of the item to be significantly higher than what is being asked because the seller didn’t do their research? Should you say anything to the seller? The Ethicist, New York Times Magazine
  3. 3. The Ethics of Buying Software Licenses Is it ethical to buy software from a software sales rep at the seller’s asking price, if you know the value of the item to be significantly higher than what is being asked because the seller didn’t do their research? Should you say anything to the seller now?
  4. 4. Wrong Price Right Price Pricing That Works
  5. 5. Pricing That Works Market Stage Target Customer Offering Your Economics Value Delivered
  6. 6. Pricing Works Better When You … • Look Beyond Price Level • Focus on Right Customer • Manage Perception of Value • Have Good Processes
  7. 7. Level Look Beyond Price Level Customer Perception Process
  8. 8. Level Focus on Right Customer Customer Perception Process
  9. 9. Level Customer Manage Perception of Value Perception Process Economic Drivers Revenue Cost Other Considerations Implementation Timing Risk
  10. 10. Manage Perception of Risk + € 1,000 €0 - € 1,000 €0 €0 € 1,000 - € 500 + € 500 Expected Value = € 500 Expected Value = € 500 Would you flip a coin? Pain (Loss) > Pleasure (Gain)
  11. 11. Manage Perception of Value • Loss aversion • Anchor high • Compromise • Herd instinct
  12. 12. Manage Perception of Value Technology  Value “Technology means nothing unless it enables a differentiated customer experience. Nobody goes into a restaurant because it has a mobile app.” CEO Panera Bread
  13. 13. Level Have Good Processes Customer Perception Process
  14. 14. Have Good Processes Bundles Incentives Deliverables Amount Metric Incentives Terms Bundles Deliverables Terms Deliverables Metric Packages Amount
  15. 15. To-Do List • Look Beyond Price Level • Focus on Right Customer • Manage Perception of Value • Have Good Processes
  16. 16. To Help With Your To-Do List… http://downloads.businessofsoftware.org/dontjustrollthedice.pdf
  17. 17. Thanks! Jim Geisman jimg@softwarepricing.com +508 - 647 - 0330 233 Needham Street • Suite 300 • Newton, MA 02464 • (508) 647-0330

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