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.sharewarepromotions.com.

executive chauffeured services Bradford .. Madison to Airport car
In The News:

Getting virus alerts on your iPhone? Tech expert Kurt “CyberGuy" Knutsson helps you learn how to handle fake scam alerts and boost security.
Tech expert Kurt “CyberGuy" Knutsson says opening emails is safe, but risks arise from interacting with links, attachments or HTML content.
Tech expert Kurt “CyberGuy" Knutsson reveals four signs of compromised Social Security numbers and offers five steps to protect yourself.
Tech expert Kurt “CyberGuy" Knutsson discusses how MAB Robotics' Honey Badger 4.0, a versatile robot, now walks underwater with amphibious skills.
An updated Android trojan called FakeCall hijacks bank calls. Tech expert Kurt “CyberGuy" Knutsson says Android phone manufacturers and Google need to step up their game on security.
The Massimo Modular E9 is a sleek, smart and comfy tiny home in 409 square feet. Tech expert Kurt “CyberGuy" Knutsson takes a closer look at what the future of housing might look like.
Every stock trader should consider a virtual private network to safeguard their trading, according to tech guru Kurt "CyberGuy" Knutsson.
Apple recently announced its new lineup of Macs and rolled out Apple Intelligence, its latest artificial intelligence-powered feature for its products.
A Swiss-engineered robot can climb ladders, showing why it's at the cutting edge of autonomous robotic solutions for harsh industrial settings.
Kurt "CyberGuy" Knutsson presents the cities targeted most by robocalls, why this is happening and what you can do about it to protect your privacy.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents
Kurt "CyberGuy" Knutsson shares tips and suggestions for how to get the best use out of the updated Calendar app available with the latest iOS update.
Your Social Security number, your unique identifier used for many purposes, has likely been leaked on the Dark Web; here are some steps you can take to protect yourself.
Researchers have developed a new technology that creates strong, sticky fibers capable of lifting objects and capturing things from a distance.
Smart rings track the same things that smartwatches do, including steps, sleep and a general overview of your overall health, and they tend have more battery life than smartwatches.
Researchers have developed a robotic finger that can perform routine medical exams like those conducted by doctors, helping to address the growing shortage of trained professionals.
Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.
Insurance administrative services company Landmark Admin reported that a data breach from a May cyberattack affected over 800,000 people.
Sotheby's will auction the first artwork created by Ai-Da, the world's first robot artist created in 2019 by British gallerist Aidan Meller.
More than 250 million users of the Verizon Messages app will have to switch to another app. Verizon is shutting down Messages in the next month.
Tech expert Kurt “CyberGuy" Knutsson provides a list of 10 celebrities who are the most targeted by deepfake scams, including Tom Hanks.
Tech expert Kurt “CyberGuy" Knutsson discusses how Vast's Haven-1, launching in 2025, transforms space living with human-centric design.
UnitedHealth confirms over 100 million Change Healthcare users had their data stolen. Kurt “CyberGuy" Knutsson reveals what happened and what caused the breach.
Tech expert Kurt “CyberGuy" Knutsson explains how iOS 18 brings new text formatting and animated effects to the Messages app.
Whether you're a social media veteran or novice, Facebook friend request scams are common. Kurt the CyberGuy provides tips to keep your account safe.

Learn Faster, Change is Coming

Challenges posed by recent economic and market shifts, though predicted... Read More

Healthy Wealthy Wise: Boost Your Productivity

We all strive for a 'balanced life'. Although we may... Read More

Control Your Fear Before It Controls You

"Fear Factor" is one of my favorite TV shows. It... Read More

Bring on the Boosters!

Nobody becomes a success alone, period. There is no such... Read More

Changing Your Luck

In this week's New Age Notebook, I am going to... Read More

The Core Curriculum Of A Wonderful Life

An acquaintance of mine once lamented that she was utterly... Read More

Trusting The Higher Self

As very few people achieve enlightenment in one lifetime, as... Read More

Persistence and Determination: Golden Keys to Reaching Success

"Nothing in this world can take the place of persistence.... Read More

There Is Room For Everyone At The Top

Do you believe that? Do you believe we can all... Read More

What We Can Do To Guarantee Our Own Success

There are so many internet marketing schemes out there so... Read More

The Parable of the Touchstone

The Great Library of Alexandria once held the wisdom of... Read More

Success Involves Ignoring Critics

Critics can destroy or inspire you. Your own self critic... Read More

The Clich?s of Success

The problem with writing about success is that almost everything... Read More

3 Keys to Fulfill Your Wildest Dreams

If you'd like to fulfill your long-held dreams, try a... Read More

Reach Your Goals - Believe In Your Own Divine Nature

Believe in your own Divine nature Despite the varying religious... Read More

Paying Attention

Being a spiritual teacher has continually frightened me. Not because... Read More

The Best Way to Perform the Miracle of Success

These days success is a hotly debated subject. Nevertheless, people... Read More

The Only Option is to Succeed

With the end of the year fast approaching, now is... Read More

How the Subconscious Mind can Accelerate Self Improvement and Success

Just how powerful is the Subconscious Mind and how can... Read More

Success Intelligence : Attitudes to Success

For each of us, how successful we feel will depend... Read More

To Succeed Greatly, You Must...

(1) Climb up from under the limitations of circum?stances and... Read More

Top Ten Ways To Create Positive Behavior Change

1. Open your mind to new ideas: Positive behavior change... Read More

Nothing In-Between

Are you on the right track?Stop for a while, look... Read More

Want Better Outcomes? Check Your Perspectives!

In my work with clients, the issue of perspectives comes... Read More

Succeed By Looking Forward

We all want something to look forward to. The best... Read More

O'Hare Chicago prom limo ..