1. 06-Feb-2012
Pricing strategy
• Applicable pricing model
• Price ranges for every job category
• Average price range
Pricing • Project size expectations & minimum project size
• Trial project
– What is your definition
– Financials
• Discount policy
• Factors that may increase/decrease the price (e.g. 24 hour work
cycle, other SLA requirements)
• Payment expectations (when, how, advance payment, etc.)
Calculating the price Pricing models
1. Look at your target markets and your competitors, your • Fixed pricing
pricing on other markets and project pricing historical • Time – and - Material
data to set your price. • Gain-sharing (risk-reward)
2. Analyse your costs and profit (margin) expectations to
calculate your price.
• Cost-plus pricing
3. Compare the above two
• Transactional pricing
• Market penetration pricing
• Any flexible pricing options?
What influences the price? Price comparison
European country Average salary Average salary of software engineers
• Technology requirements Switzerland 69,500 in various countries
Germany 44,275
• Skills & experience
United Kingdom 44,200
• Complexity of the project Denmark 43,800
Nearshore/offshore country Average salary
• Length of contract France 38,800
Brazil 29,800
The Netherlands 36,800 Russia 15,600
• Opportunities Finland 35,900 Romania 14,900
• Other SLA and contract requirements, such as; Belgium 32,000 Czech Republic 12,400
Sweden 31,000 Poland 11,700
– 24 hour work cycle
Spain 24,750 Jordan 9,100
– Error resolution requirements China 9,000
Thailand 6,000
India 5,100
• General terms and condition? Sri Lanka 4,200
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2. 06-Feb-2012
Presenting the price
• Create price brackets:
– Junior programmer EUR[ ]/man day or man hour
– Senior programmer EUR[ ]/man day or man hour
– Designer EUR[ ]/man day or man hour
– Tester EUR[ ]/man day or man hour
– …
– …
• Average price [ ]/man day or man hour
• Should I put it up on my website?
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