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Complex Pricing = Lower Sales

March 22, 2011 6:32:16.457

Here's an idea I've been hammering on for years - complicated pricing kills sales:

One thing many companies — in any industry — can learn from Apple is the importance of simple pricing. If you make it easy for people to understand how much they’re paying, and what they’re paying for, it is more likely that they’ll buy it. Or perhaps this is driven more by the converse: if people are confused about how much they have to pay, they’re more likely not to.

That's obvious, and yet so many companies miss it. You'll often hear that "the Enterprise is different", but remember - purchasing agents are just people too, and if they can't follow your pricing they'll get every bit as jumpy as anyone else.

Also, clear pricing doesn't have to mean low pricing. Apple certainly isn't found in the bargain aisle at the Dollar store...

Update: Along the same lines as this post, I got an email this morning that had this in it:

I’m shocked at how difficult it is to buy a copy of VisualWorks! I couldn’t find a link on the site: “Buy this software” I ended up leaving a generic message.

Make it hard to buy your software, and you'll needlessly limit the size of your user base.

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Comments

Re: Complex Pricing = Lower Sales

[Martin Maděra] March 24, 2011 9:53:26.914

Hello,

I would also like to ask how much would it cost to make commercial applications with VisualWorks (rather open-sourced application core with paid plugins). Okay, not easy to find, but there is a page on the Cincom web telling me I would pay some percents per sold copy. And a contact e-mail on another page.

Yes, this is quite time consuming (I wrote e-mail yesterday and I still do not have reply now ... but Cincom is in different timezone (-6h to me - I am in the Paris zone) so may be I should not worry).

But if my reading was true and I have to pay only some percents per sold copy (and if it will not be 95%) with no or small "starting fee", I will have no problem with this model. What I have problem with is VisualStudio ($1,199 for professional edition (I am not satisfied with the express edition :-/) and ReSharper is almost a "must have" - €176) Or VA Smalltalk - $6,995 :-O ... Okay. Paying $7000 per team or $1500 per developer might be affordable for big company. However this is killing for a graduating university student partly employed in mid-size software company with a plan for small application, which will be done by 3 people in spare time.

Or Pharo smaltalk (which is free) - they did a huge amount of great work, but there is still no reasonable documentation. I need to know 'what can I do with this tool' and 'how can I do that'. When I was trying to make a window with grid using the UIBuilder I felt like I had to join two pieces of wood with a screw but had no idea which tool to use. And everybody told me to go to the tool factory and see how do they make tools (finally I felt like I used a car key ... it worked ... screwdriver or at least hammer would be better choice but I did not know this tool exists). This is academic way to do things - trying to reinvent the wheel and a lot of time to make it. But I do not have so lot of time. At home I have only few spare hours a week. At work I am paid when customers can see the working result. If I tried to say that I spent 4 hours trying to do this simple web service because I needed to read half of the smalltalk source code, install and check 2 libraries for doing web services ... I would have only one hour to take all my stuff out of the office and run very very far. Or I have been told by one squeak user that SOAP Web Service are nontrivial thing ... our company business relies on them and we need a simple way to do them (luckily we have it). And the project I would like to use VisualWorks for also relies on remote communication (I suppose VW for backend and Java/Scala/Vaadin frontend not necessarily on the same computer). Okay, they are non-trivial when you must do them "from scratch" (like we had to do in one of our university project). But why to do this nonsense if you are not university student/academic scientist?

I do not think that sending an e-mail is an obstruction when I want to use VisualWorks commercially. Communication is not obstruction (nor it should be complex thing like the squeaker told me ... if the Cincom excuses my poor English it would be easy ;-) ). I think when I tell them what I want to do they can offer me a license/pricing model which suits better my needs. I would rather share a part of revenue than paying huge fixed "starting price". There are much bigger obstructions when you want to use smalltalk than waiting for e-mail from Cincom employee.

MM

PS: Mr. Robertson, you did a great thing with your screencasts. When working with VW I usually find screencast (they are shipped on DVD from Cincom) - they tell me 'what can I do with this tool' and shows the basics. The further details I am able to find in books / help which also comes with VisualWorks. Nice, fast and easy ...

Re: Complex Pricing = Lower Sales

[James Robertson] March 24, 2011 10:43:31.346

It's not high pricing that's a problem (unless you go too far, of course) - witness Apple's success. It's complex, unclear pricing that causes problems.

Re: Complex Pricing = Lower Sales

[Martin Madera] March 24, 2011 11:18:05.122

Apple's prices are ... I would say "above average". They offer some "added value" compared to concurrency and the users consider the "added value" good for the extra money. Okay, seems to work for them.

Do you consider VisualWorks pricing policy clear enough or affordable even for a small team of developers? The person who posted you that e-mail did not seem to.

Re: Complex Pricing = Lower Sales

[James Robertson] March 24, 2011 12:06:57.217

Well, I don't think the small developer pricing is out of line - it's obscurity that I think is the problem

Re: Complex Pricing = Lower Sales

[zenchess] March 25, 2011 20:09:13.908

I inquired into using visualworks for a small time project that I would sell. I was told that I would have to pay a percentage (that's fine), and I would have to sell a minimum number of copies per year. I was also told I could call someone from the company for more information.

That basically ended my interest in visualworks. This was a couple years ago, hopefully things have changed for the better since then.

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