The New York Times will likely continue to charge money for the right to quote when authors continue to pay them.
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The New York Times will likely continue to charge money for the right to quote when authors continue to pay them.
Try to figure out how much benefit the company thinks it would derive from your product. That's the absolute ceiling of what you can charge. If the company can earn an extra $1,000 by using it, it's not going to pay $5,000.
Now think how much the company is currently spending to deal with the problem (labor costs, software licenses, etc). This might be a good estimate of the floor for how much you can charge.
It's hard to say without more information, but you'll probably want to think about pricing somewhere in between the ceiling and the floor.
The lower your price, the higher the ROI you can demonstrate and the more likely the sale (usually). Of course, if you price too low, it can make you look non-credible and scuttle a deal. I mean, whom would you rather trust, a neurosurgeon that charges $40,000 per operation or one who charges for $8 per operation?
Unfortunately, I suspect that you've anchored your prices low with the free, $5 and $9 tiers. As such, they'll probably balk at a high price for the app.
You'll need to break your customer's mindset and get him to understand that this new version is delivering a lot more value than your existing plans.
Better yet, you might want to see what you can do to look like you're not even selling something that's at all like your other plans.
Focus on selling more than just the software. Support, updates and guarantees are all things that people pay for.
One key piece of advice I have is to think this through. Supporting one unique customer with a unique product version might cost you a lot more (in terms of time and aggravation) than it is worth. Think about how likely you are to sell similar "private things" to other firms (and what other benefits you might receive from this specific sale) before you decide that it's worth selling in the first place.
BTW, here's a book I wrote about pricing software: http://taprun.com/pricing/
* They are friends with the person giving the raises.
* They are perceived as likely to produce significant value in the future for the person doling out the raises, but are in danger of leaving.
Pick something that you haven't done. Try it!
Source: I wrote a book on software pricing, have a blog with 200+ articles on pricing, a video on my homepage with some common pricing pitfalls and various other materials. http://taprun.com
The two most popular articles are my guide to content marketing http://taprun.com/content/ and my guide to business strategy http://taprun.com/robot/
I'd start by thinking about how much your product is worth to the company. How much money will it save/make them? Don't just look at the functionality that you provide, but also at risk reduction. Charging based on value is called value pricing ( https://en.wikipedia.org/wiki/Value-based_pricing ). You'll want to charge less than what your customer has to gain (otherwise they won't buy). This is the number you should be working from (using out-of-pocket costs to determine pricing is called time and materials pricing and is a great way to go broke https://en.wikipedia.org/wiki/Time_and_materials).
Your original app pricing has little to do with what you can charge enterprise customers, because the product that you're offering is different. Yes, your old pricing will act as a bit of a psychological anchor, but if they've contacted you for a custom plan, they are probably willing to spend quite a bit.
Source: I write a blog on the subject of product pricing (and wrote a book specifically about software pricing - http://taprun.com/pricing/ ).
1) I give regular status updates to the PM 2) I communicate problems as early as possible 3) I estimate work based upon past experience with similar tasks 4) I always think not just about estimates but also risk 5) I am constantly looking to provide trade-off suggestions to maximize project ROI
Source: I'm a PM
My next piece is to be wary of discounts. Consumers will become accustomed to them and eventually come to demand their continued use (see J. C. Penney is a great example of a company that got burned by this).
One more tip is to think in terms of value. Don't just think about the functionality you provide - think about intangibles too. Do you reduce risk? You can charge for that!
I could probably write a book about this topic. Oh wait, I did! http://taprun.com/pricing
I wrote an article on this last month... http://taprun.com/articles/secret-to-freemium-pricing
A less rigorous option is that you could require regular drops at which point you look at the code and only agree to buy the next drop if the existing drop meets your need.