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How to price a big system for a company

It is a web system with many modules used by different levels of stakeholders, and it automates the interaction/cooperation between the users. The company staff will be using this systems will be tens of hundreds. It includes many modules mainly with the main purpose of automating their quality control/assurance/development/improvement-suggestions.

Answer 5896

I always find these questions about pricing somewhat amuzing. Consider this:

  1. You can basically ask whatevery you want to a customer, the question is wether or not he would pay that.
  2. If you run a company, goals have been set for the company. Not all prices are a good fit for all companies.
  3. Cheaper prices usually means that your customer base has the potential to grow.

The second is basically what it’s all about for a startup. Think about what you would be satisfied with if you would get that. Think about a minimum and a maximum. Satisfaction is about what you want to achieve, not about a wage. For example, if you are a startup, you probably first want to survive (sustainability). If you can achieve that with the customers that you already have in your pipeline, I’d say that’s a pretty good deal, regardless of what you could have earned.

It may strike you that as an enterpreneur I really don’t care about “could have earned”. I strongly believe that greed is one of the deadliest sins of a startup company, so I focus on getting a price that people think is ‘fair’. For example, I only consider percentages of the underlying process fair if it’s success based and if I have a strong influence in that. From what I understand, you’re basically providing an “advanced phone”.

Another thing I’ve learned is to keep pricing simple. I’ve seen pretty difficult constuctions with price/click + price/month/person + price/whatever. – it just confuses customers, which means they’re not going to sign. The easiest sell is a fixed price (A), a fixed price per month (B) or fixed price per month per person (C). I recommend against everything else.

If you’re curious about numbers, I found approximately A = B * 24 and B = C * 10. So if A is f.ex. 50K, B is 2K and C is 200,-. Choose either A, B or C and go with it. Also note that while C might seem interesting, your customer has to stick with 2 years and 10 users to make it beneficial wrt A – and it gives you a tougher sale.

One of the things I usually do with my customers is that after establishing my own min / max, I go talk to them and ask them how much they would be willing to pay. I also ask them why. Then I shut up until the room is silent for at least a minute. Next, I cap the pricing to the min/max I thought of earlier and that’s what it’s going to be. Note that this implies that under normal circumstances I won’t charge my customers more than the max I established earlier.

During the lifetime of the product I continuously think about bringing the price down (yeah really) to the minimum wage. I found that “More features + less price = more customers + more satisfied customers”. Also, I assume all customers talk to each other, so I charge them equally.

Answer 5615

If you’re selling turn-key enterprise software without being familiar with how to sell it, don’t waste your time. The main reason you’re around is to either drive the price of your competitors down or sketch out a rough spec for nside use free of charge.

If not, your question is too broad. But here are a few pointers:


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