Suhit Anantula's Library tagged pricing → View Popular

16 Oct 08

When we first priced Basecamp in Feburary 2004 the plans were $9, $19, $39, and $59. There wasn’t much science behind it. We asked ourselves a couple questions:

1. What would we pay?

2. What numbers feel right?
There’s a big psychological and emotional side to pricing. A friend who worked at Wal-Mart once told me that Wal-Mart never prices anything ending in a 9. They always end in 8 (or 6 or 4) or something other than 9. They want the customer to know that Wal-Mart is always working hard to shave an extra penny off the price — hence the uncommon 8 not the familiar 9.

07 Oct 08

Just about every new product coming to market is being offered as a service rather than packaged software. But pricing remains something of a mystery. A while back, I started a spreadsheet that plots price points for different saas accounting offerings. At the time I concluded that no-one has figured out a viable model that could be generalized for the whole market. Despite it is far from complete and out of date, I believe the same still holds true.

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