However, we’re also cognizant of consumer impressions such as Hans Fremuth’s “I’d rather buy a software for $40 at a company that I feel comfortable with instead of $20 for a company that offers its software like the drive thru.” To that end much of the work we’ll be doing in the next few months will be outside the core code. Instead, we’ll be improving the look and feel of our web site, documentation and buying processes to match those expected in our new market before we dive in.

Over the years I’ve been nervous about raising the price of my software, but all price hikes (until the last one) raised not just my income but the number of sales. After the last and likely final hike the number of sales finally declined but income was still up thanks to the higher price. My sweet spot is likely at a somewhat reduced price, but I’m reluctant to change something that is working well. For comparisons see

http://www.dplot.com/asp/normalized_sales.png

After viewing that chart you may come to the conclusion that renting Al’s Brain trumps all. I would not discourage that conclusion

The Medical edition may be considered high-priced (at $69.95 US), but I believe it gives people more than competition can offer both in terms of software functionality and also support and future development. I’d say that Home and Medical are both best sellers, with the Lite edition being the least-bought.

Still, I don’t know for sure whether my pricing is correct and I would be very interested in trying to learn about pricing techniques some more.

Keep in mind that the “product” is not just your software, it’s your company. It’s the way a potential customer experiences your website, the trial period, your FAQ, your documentation, your support. The more comfortable the buyer feels with your offer, the more he will value it.

I’d rather buy a software for $40 at a company that I feel comfortable with instead of $20 for a company that offers its software like the drive thru.

Just my 2 cent

Markus

Pricing is always tough. There seem to be 2 strategies that perform well.

Freemium as a marketing investment to but market share, works if you can develop a good viral coefficient and make it addictive, so you get upgrades.

Or charge somewhere around 75th percentile for your market, to establish yourself as a premium player but not outrageously expensive

Most sales professionals have found that this approach is not effective on the Internet because today’s buyers want to know price information immediately. If pricing information isn’t on the home page or product page, they’ll click your “buy now” link to find it immediately. And you can only hope that, after finding out how much it costs, they return to your home page or to your product page to learn more about what you’re offering.

It sounds like your experience is different from the conventional wisdom. There are so many factors – Are you competing in a growing market, a mature market or a declining market? Are you a well-known market leader in your software niche, or do you not rely upon name recognition to boost your sales? Do your direct competitors have prices that are higher than yours, or about the same, or lower?

Your experience demonstrates that it’s important to test everything. Make changes, measure the results, and keep tuning every facet of your website.