Business of Software Chat - Setting the right prices for your software

When Neil asked me to host a chat on software pricing it made me smirk a little. An ancient legend has it that Neil once stated his SQL Compare product to be worth ‘no more than $50’. I tried to find out the current price to compare but couldn’t - the Red Gate website only lets me view a UK price. There are ‘Standard’ and ‘Pro’ versions, and a range of upgrades to all-in bundles, not to mention sidegrades for support contracts. Who knows, sending flowers and chocolates to the right salesperson might open up a whole new pricing structure. What Red Gate has learnt is that the answer to the question “what price should I sell my software for” isn’t a number with a $ (or £) sign in front of it, but a range of approaches targetted to the customer need.

There is plenty of advice online about techniques for setting prices – including a few good articles on the JoelonSoftware blog, but these tend to be focussed on the web based product business. So here are a couple of topics that we will be covering in this chat.

1) Product or Service? – or ‘why can’t I sell my product for more than $1,000’.

2) The wisdom of FREE! – does the freemium pricing model still make sense?

3) Tricks for charging a higher price in a downturn without offending your customers.