jim geisman pricing isn’t rocket science - it just takes some work at business of software...
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Jim Geisman Pricing Isn’t Rocket Science - It Just Takes Some Work at Business of Software Conference 2013. More information about Business of Software - www.BusinessofSoftware.orgTRANSCRIPT
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233 Needham Street • Suite 300 • Newton, MA 02464 • (508) 647-0330
Pricing Isn’t Rocket Science ---
It Just Takes Some Work
and time
and teamwork
and judgment
and experience
and luck
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The Ethics of Garage-Sale Arbitrage
Is it ethical to buy something at a yard sale or flea market at the seller’s asking price, if you know the value of the item to be significantly higher than what is being asked because the seller didn’t do their research?
Should you say anything to the seller?
The Ethicist, New York Times Magazine
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Is it ethical to buy software from a software sales repat the seller’s asking price, if you know the value of the item to be significantly higher than what is being asked because the seller didn’t do their research?
Should you say anything to the seller now?
The Ethics of Buying Software Licenses
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Right Price
Wrong Price
Pricing That Works
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Pricing That Works
Offering
Market Stage
Value Delivered
Your Economics
TargetCustomer
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Pricing Works Better When You …
• Look Beyond Price Level
• Focus on Right Customer
• Manage Perception of Value
• Have Good Processes
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Look Beyond Price Level
Level
Customer
Perception
Process
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Focus on Right Customer
Level
Customer
Perception
Process
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Manage Perception of Value
Revenue
TimingImplementation Risk
Other Considerations
Economic Drivers
Level
Customer
Perception
Process
Cost
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Manage Perception of Risk
Would you flip a coin?
+ € 1,000
+ € 500
€ 0€ 0
- € 1,000
- € 500
€ 1,000€ 0
ExpectedValue = € 500
ExpectedValue = € 500
Pain (Loss) > Pleasure (Gain)
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Manage Perception of Value
• Loss aversion
• Anchor high
• Compromise
• Herd instinct
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Manage Perception of Value
“Technology means nothing unless it enables a differentiated customer experience.
Nobody goes into a restaurant because it has a mobile app.”
CEO Panera Bread
Technology Value
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Have Good Processes
Level
Customer
Perception
Process
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Have Good Processes
MetricMetric
Bundles
Amount
Terms
Deliverables
Incentives
MetricMetric
Bundles
Amount
Terms
Deliverables
Incentives
License Model
Price Setting
Transaction Structure
Metric
Pack
ages
Amount
Terms
Incentives
Deliverables
Standard or Tailored Offerings
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To-Do List
• Look Beyond Price Level
• Focus on Right Customer
• Manage Perception of Value
• Have Good Processes
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To Help With Your To-Do List…
http://downloads.businessofsoftware.org/dontjustrollthedice.pdf
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Thanks!
+508 - 647 - 0330
233 Needham Street • Suite 300 • Newton, MA 02464 • (508) 647-0330