backyard room additions keystone remodeling libertyville split level exterior update mcdermott remodeling cary mobile home add on addition .. Chicago Drug testing

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. and

In The News:

How To Get As Lucky As J. Paul Getty

J. Paul Getty appeared to be incredibly lucky, but it... Read More

How Close Is Your Fortune?

A farmer in Pennsylvania decided to sell his farm, but... Read More

Do You Know Whats The #1 Success Secret Is?

How many people do you hear complaining about their job,... Read More

Create Your Future Through Visualization

The best way to predict your future is to create... Read More

Set Your Mind For Success

Did you know you can literally program your mind so... Read More

Keeping Your Mind Tuned for Success

Absolutely no one can underestimate the power of the mind... Read More

Reach Your Goals - Bring In The Big Guns

Bring in the big guns People love to be needed,... Read More

Awaken to Something New in Your Life: Conscious Change

What do we want most from life? Certainly, we all... Read More

Have You Given Away Your Power?

Does your life feel less than fulfilling? Are you waiting... Read More

Five Tips for Perfect Transition Decisions

You're considering a new career, new place to live or... Read More

Natural Laws of Success

Jim Rohn wrote in his book The Five Major Pieces... Read More

Who Is Dietrich Mateschitz?

Hope you're having a GREAT Day!Last night I was reading... Read More

Discover Your Path to Success - Part 2

Time taken for self-analysis is so important in developing your... Read More

Authentic Success

A More Effective WayI own a stack of self improvement... Read More

Psychological Tips For Effective Examination Techniques

One of the inevitabilities of University life is the examination.... Read More

Succeed !

Are you successful? What does that word mean to you?... Read More

Busy, Busy, Busy

Being busy has become a way of life for many... Read More

Evaluating Your Associations (Part One)

If you were to evaluate the major influences in your... Read More

Take Care of Yourself to Achieve Maximum Results (part 1)

All too often, we push ourselves past the limits of... Read More

Discover Your Path to Success - Part 3

If you have read this far, we both know you... Read More

Finding Your Purpose

What is success? As author and speaker Earl Nightingale said,... Read More

Success Through Discipline - The Rewards Of Discipline

Many of the problems we have with discipline are caused... Read More

You are a Genius - Unlocking the Power of the Mind

(Excerpted From The Jim Rohn One-Year Success Plan - Pillar... Read More

10 Principles of Success

How do we define success? Webster's dictionary defines success as... Read More

How to be Professional?

Is it difficult to be professional?I think from my experience... Read More

street light photos parking lot lighting fixtures Pete's produce ..
street light photos parking lot lighting fixtures Pete's produce ..