| |
| |
|
Success Information |
|
|
|
Price of Success
We're all adults, and most of us probably like to think that we're fairly well-informed when it comes to basic life wisdom. We're familiar with the benefits of a bird in the hand over two in the bush, we know the risks of putting all our eggs in one basket, and of course we'd never dream of judging a book by its cover. Right? Well, when it comes to books, most of us do judge the covers. If we paid no attention to them at all, the book industry probably wouldn't bother pouring millions of dollars into cover illustrations, embossed type fonts and decorative golden swirls. A plain white paperback would do just fine if we actually followed that particular ancient adage. In our own line of business, one might argue that there isn't much of a cover to judge. Shareware tends not to come with illustrations and golden swirls, so authors often think that their prospective customers will dive straight in and familiarize themselves with the features and interface of their particular product. They are wrong. Prosaic as it might sound, the first thing most people look at is the price. The price of the product will also continue to remain of high importance while they browse through the website, install the trial version and decide whether or not to purchase. Yet in spite of the fact that price is one of the most important factors where the marketing of a product is concerned, it is also one of the least understood. Many seem quite content to bluff their way through, giving little or no thought to the implications that a price tag can carry. As a result, most shareware authors make the same mistake: they sell their product for far too little. Bargain bins may serve their purpose in some areas of business, but I firmly believe that there is little room for them in the software industry. Aside from impulse items such as low-cost games, most people need some level of reassurance that the software they're buying is of at least reasonable quality. This is why they are not likely to go for the cheapest available option. Think about it: 'reasonable quality' and 'cheap' are not two concepts that look overly natural placed side by side. You know it, and so does the average consumer. Cheap is alright when you buy garbage bags, writing paper and playing cards, but when it's something that has the potential to destroy a very expensive PC system, people tend be prepared to pay that little bit more. The number one rule when it comes to understanding consumer behaviour is simple. At times the consumer may seem puzzling and surprising, but ultimately is quite predictable. All it takes is a little bit of probing and patience, and you will know more or less what to expect. Once good example of this is the whole area of perceived pricing. If you place two fairly similar products side by side and price one at $20 and the other at $80, you may well find that people show more interest in the more expensive application. Why? Because a higher price implies a higher quality. We know that if we spend $500 on a car, we're not going to be as satisfied as we would be with a $25,000 model. When someone goes looking for software, their number one concern is not saving money. It's finding a solution. And if a higher price implies a better quality solution, what message is the price of your software sending? A sensible starting point when you want to set a price for your product is the market (or markets) that it may be sold in. First, you need to define your user bases as precisely as possible. "Home users" and "business users" won't suffice - they are far too general. You need to take a very close look at your potential customers, and try to identify their level of expertise, their individual needs, their spending habits and their motivations. The next stage is a more obvious one. Go and see who your competitors are. If you can find them, rest assured that your potential customers will do the same. Find out how they do business, how your product compares to theirs, where they sell, how they sell, and, of course, how much they charge for their products. Don't be tempted to make the number one error in pricing strategy. You do not have to undercut your competitors, and you have every right to charge more than they do. Next, find out how well-known your competitors are. If they have a client page, check who uses their product, and see whether you're even going after the same markets. What strengths do your competitors have that you may lack, and vice versa? Have a look at the trial version of their product, and see how yours compares. Their weakness is your opportunity, but you have to recognise it to be able to use it. At this point you may well have some sort of approximate price in mind. First, there are a few important areas that you need to consider. One of them is whether you're going to use a cost-based or demand-based pricing strategy. A cost-based strategy means that you'll be competing on price. I think we've established that I'm no great fan of this particular method. A demand-based strategy, on the other hand, means that your primary focus will be on the needs and wishes of your consumers. Let's assume that the product you're selling is a good one. Let's also assume that you've done your basic market research. You know which markets you'll be operating in, and you know the needs of your potential consumers. Broadly speaking, you have three viable options for setting the price. The first is an amount that you feel the consumers are prepared to pay. As a general rule, this is an inaccurate means of pricing your product, and pays no attention to all the ideas of perceived pricing. On the other hand, if you allow your prices to be set by your competition, then you'll be placing yourself squarely in their shadow from the very beginning. The most realistic option is to set the price according to the value that your consumers place on the product. But there's a chicken-and-egg scenario here. Is the price high because the quality is good, or is the quality good because the price is high? This is where you need to get the balance right. Don't scare your customers away with an absurdly steep price, but don't make them turn up their noses at what they might perceive as a low-budget insult of an application. Finally, let's not forget a little bit of consumer psychology. It may seem very basic, but the fact is that $49.99 is vastly more appealing than $50. Why? I honestly don't know. Some buyers need to reassure themselves that they're doing the right thing in picking your product. If that one cent allows them to believe that the $50 product is a forty-something dollar product, then so be it. The price of your product is so much more than the number of dollars people need to part with. It speaks volumes about the quality of your product, and also the confidence that you have in it. The price tag tells the customer how much you think the product is worth. If you yourself don't believe that it's worth more than a few dollars, how could you ever expect your customers to think otherwise? A high price implies high standards and high quality. In this age where low-price and low-quality have become the norm, stand-out from the crowd. Be seen as a company offering quality over low prices. Be seen as a company with high standards. Be seen as offering value for money - higher value than the rubbish found in the bargain bins. Set yourself above your competition and sell your software for it's true value. Be seen, be sold! Copyright 2004 Dave Collins About The Author Dave Collins is the CEO of SharewarePromotions Ltd., a well established UK-based company working with software and shareware marketing activities, utilising all aspects of the internet. http://www.sharewarepromotions.com and http://www.davetalks.com.
MORE RESOURCES:
Success - Google News |
|
|
|
RELATED ARTICLES
Success: How To Succeed Most of the Time We set goals, strive for them and only consider ourselves successful if we attain them and attain them well. Reaching milestones is important BUT when we equate those milestones with "success", we get ourselves in trouble. Extend Your Influence Without Shortening Your Life Please repeat these four words out loud: "Maximum Impact.. Reach Your Goals - Measure Twice, Cut Once Measure twice, cut once Just as in carpentry, making sure that your decisions are based on sound data is essential to reaching your goals. Ensure that you know precisely what is going to be required to make your dreams come true, and that you meet these criteria and are capable of the sustained effort necessary. Paying Attention Being a spiritual teacher has continually frightened me. Not because I don't want to do it but that I don't feel adequate for the job. Psychological Tips For Effective Examination Techniques One of the inevitabilities of University life is the examination. It is your opportunity to demonstrate your new knowledge and to reap the rewards. Leave a Legacy What do Sam Walton, Ray Kroc, Hilton, Marriot, Firestone, Elvis Presley, The Kennedy's, John Huntsman, and Henry Ford have in common? They have all left a legacy. Think about the Waltons. How To Become Rich and Famous If you want to be rich and famous, you have to focus on your strong points. Don't dwell on your weaknesses. Success Takes Practice As a speaker and trainer, people often approach me after one of my programs to tell me how excited they are about the strategies they have learned and how they plan to put these ideas into action. When I connect with these people later on and ask how the techniques are working for them, I usually get answers such as "I really planned to use them but then things got so crazy that I never had the chance. IF and WHEN IF and WHEN were friends. Every week they met and had lunch. Build Rapport Through Buzzwords What if I told you that you could be more influential and powerful and all you'll have to remember one simple thing? To persuade your people, all you have to do is: "Cook their favorite meal before they're hungry.. What Bowling and Success Have In Common I was flying home from a seminar in Atlanta yesterday afternoon on Delta and they have TVs on each seat.It was 1pm and I was a bit tired, so I was channel surfing and wouldn't have minded if I just fell asleep for the trip. Attitude Is The Key To Success We all want success in life. We want success in our home life, business life, and in our relationships with others. The Power of Mind-Imagery Today I feel inspired that I should speak more to the framework of a successful mindset. We've already discussed how to ignore negative thoughts and encourage positive thoughts by monitoring what we allow to dwell in our minds. How to Succeed for the Rest of Your Life I spoke recently with the owner of a large clothing store who had poured years of effort into his business. He had achieved his dream and built a successful career. Learn To Fail - Its Good For You! As a child you probably learned failing is bad.. Are You In It - To Win It? Have you ever heard this? "It isn't whether you win or lose. It is how you play the game. Great Century, by George George Burns' career could have ended as early as 1958, when his wife Gracie Allen retired from Show business. Burns continued the show after Allen retired, but the show was cancelled after one season. Busy Beavers Build Piles Of Sticks "Well, you're just a busy beaver, aren't you?" You've either heard or used this cliche, but what do you know about beavers? Let me tell you about something I learned.One night on the Discovery Channel, I watched a scientist determine how beavers knew where to put the sticks to build their dams. For Meeting Planners: Organizing Your Office for Less Stress and More Profit If you discovered your speaking career depended on how organized your office was, your reaction could range from complete composure to sheer terror. Even the most successful professional speakers sometimes utter, "Some day I'm really going to get organized," but purging files, organizing computer files, tackling piles of unread journals, or learning a new software program (even one that will help you get organized!), usually gets pushed to the bottom of your list of priorities while you handle today's crisis. Reach Your Goals - Start A Round Robin Start a "round robin" goal letter with others who need a little motivation and accountability If you know a few people who are working on projects of their own (and lets face it, how many people do you know who aren't) ask them if they'd be interested in starting a "success round robin." Participants do not have to be aiming for the same goals for this to work.
|
| home | site map |
| © 2006 |
