Price is what you pay. Value is what you get
September 22nd, 2009
This quote comes from Warren Buffett. And with it, we want to introduce you to the fine art of "product pricing". As it was practiced by the full WordonWiki team.
In our pricing workshops, we had the full spectrum: from free forever, to ridiculously expensive. We now think we have come to something that is reasonable. Perhaps the more important discussion was: "who is our customer, and what do they expect from us".
To answer that question, we created a little story. Our customer is called Nick, the team lead for a dedicated team of 4 or 5 professionals. We couldn't really think of a sector, but one thing was sure: Nick was not in software. Nick's company is a Microsoft Office customer. All documents, spreadsheets and presentations were typical Microsoft Office files.
To aid in communication with the sales people, customer service and management, Nick found himself constantly sending out and updating office documents. With the familiar consequences. He spent countless weekends integrating revisions from different people. He had become the company's champion in the Microsoft Word side-by-side comparison. (If you don't know side-by-side, here is a nice 61minutes intro)
So Nick got himself and the team into 'wiki' software and after some evaluation decided they would go for a hosted solution. Of course, it didn't fly. While it started out good, the people outside Nick's team soon reverted back to mailing documents. Nick had been careful to select a wiki that would do WYSIWYG, but to no avail: people just couldn't get the tables and pictures in the way they wanted.
The happy end to the story is that Nick became a WordonWiki customer and lived happily ever after.
The morale of the story
So what does this typical customer want:
- A quality product/service with a low entry barrier.
- Growth path with price points that can be linked to a clearly increasing added value.
- In case the business demands it, a possibility to migrate from a hosted solution to an in-house service.
At the same time, we as a company need to make money to pay for hosting, housing and excellent software people.
So after some Excel trickery, we ended up with this.
What we didn't cover yet...
We are sure there are a lot of non-profits out there that could benefit a lot from an easy-to-use Wiki software like ours. We have seen many companies offering special prices for those organizations. However, we must say we don't have any experience with this. There is also not a lot to find on how to set prices for non-profits. The best we could come up with is that we charge those organizations some sort of Cost+ subscription. Meaning we don't loose any money on it (we don't have deep pockets, yet), nor do we want to make big profits in those cases. The + in the Cost+ scheme is just to add some safety and to confuse the competition. Anyway,
- if you are a non-profit, shoot us an email and I'm sure we can come to an agreement,
- if you have links to articles that could give us more insight on the pricing topic, please comment on this article.
--- Roland