Share Article Smarter Pricing Decisions
From the outset PricingWire has been focused on the critical role that pricing plays within any business. Yes, every business must charge a price if they plan to be a business for very long. However, pricing goes beyond the simplistic idea of just selecting a price and then watching what happens.
If your business wants to achieve its full potential for positive and profitable outcomes in the shortest amount of time . . . it will serve you and your shareholders very well to understand the complete and wide impact pricing has on the entire business.
Think of PricingWire as an expert advisor that helps your business remain in the best position to make smarter pricing decisions, improve value propositions and create and grow paying (and profitable) customers.
Please take a moment and consider the clear benefits of understanding the answers to these questions :
1) What do your prospects and customers really value (wants and/or needs) ?
2) What are your prospects and customers willing to pay for that value ?
3) How can your business differentiate competitive advantages over alternative
sources of that value (e.g. - what are your value advantages) ?
4) How do different customer and market segments value different offering combinations,
bundles, pricing structures, purchase processes, promotions and messaging ?
5) What are the most effective methods of communicating your value advantages and offerings
(stressing the importance of consistent messaging) ?
6) How do your prices impact value perceptions and how do value perceptions impact
willingness to pay certain prices (conversion & renewal optimization) ?
7) What role does pricing play in revenue growth, cash flow requirements and profitability ?
. . . those are just some of the areas that PricingWire can help your business.
PricingWire offers a time-sensitive approach to consulting engagements, conducts proactive pricing strategy workshops and also helps you remain aware of how other businesses are approaching and succeeding at converting value into profitable revenue and monetizing demand (aka: pricing).
Do not delay or settle for anything less than your full potential for success.
How Often Do You Review Your Pricing?
I recently discovered Qualtrics which provides survey software solutions. Qualtrics' tagline is, "sophisticated research made simple". Searching for them on Twitter led me to their Pollmo offering. Wanting to give Pollmo Beta (tagline: "world's simplest polling application") a try I attempted to create the below poll, but it did not produce the embed code.
So I decided to sign-up for the Qualtrics free account to create the poll. Take a look and kindly respond below.
Qualtrics Website Note:
There is no pricing information anywhere on the Qualtrics website . . only the option to request a quote. My next poll will be: When a company's website does not include pricing information, how likely are you to contact that company to learn about pricing?
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Bantam Live Post-Beta Pricing Page
February marked the month that Bantam Live exited beta and launched their offering and pricing details. I like a lot of what they have done and it is obvious they have been doing research and looking around at other successful web-based solutions.
Two posts, with more details / commentary, can be be found over on our Pricing Observer site, take a look.
Curious About Price Point Frequency
Before heading home from the office, I decided to do a quick check on my curiosity around the frequency of price points. The fastest and easiest method to serve this curiosity was to do a Google search for an assortment of price point variations and observe the number of results that Google returned.
When pricing a product, service or solution it is common for many to wrestle with how to determine what the actual price point should be.
Common questions such as:
(a) Should the price point end with .00, .95, .99 or display no decimal or cents?
(b) Should the price point be $30, $30.00 or just below at $29.95 or $29.99?
In this post, I don't answer those questions . . . but I do offer what curbed tonight's curiosity around what I'd find via a simple Google search.
Below displays my findings and while there is not a whole lot to derive from this, it does give me an idea of which price points are more common across the pages Google indexes.
Side note: Curiosity increased, so for one set of price points I added a comma after the dollar value and the word SOFTWARE to the search criteria (e.g. - "29.95", software). I have included those results (with percentages).
Simple Math: 4 Variables That Impact Economic Performance
One truth I know about business is that there are only a given number of variables that a business can address to improve bottom line profitability.
4 Options to Improve Profits :
REDUCE
- Fixed Costs
- Variable Costs
INCREASE
- Revenue / Sales
- Prices
Many know this and yet few seem to grasp such a simple truth. The reason I know this is primarily due to my comprehensive background, real world business experience in numerous business environments and being exposed to studies that reveal . . . of the 4 options above, pricing has the greatest pay-off potential.
The below table is from a McKinsey Study and more can be found in the book, The Price Advantage, by Michael Marn, Eric Roegner, and Craig Zawada.
Combining this insight with my interest in Government and Politics, I thoughtfully concluded this must also be the case for Governments and also for Citizens. In the case of Governments, this is why there is a thresh hold that, once passed, inevitably creates economic realities where higher taxes (prices) are seen as the only means to recover before the hole is too deep. Fiscal discipline and a proactive approach to a sustainable spending strategy is relevant for Governments, Businesses and Citizens. It is not emotional it is simple math.
To pull this thinking together I created the Economic Variable to Stakeholder Impact Assessment Matrix (EVSIA Matrix) to more easily explain and analyze relationships. It includes the four options above (variables) and the three stakeholders (Citizens, Businesses, Government).
Given that the Government is to be of the people, for the people and by the people . . . hopefully the EVSIA Matrix will make more clear the best solutions that will produce favorable economic conditions for all stakeholders and ultimately favoring Citizens above all stakeholders.
Disclaimer: This is a work in progress. I have thoughts on additions and modifications but wanted to put it out for others to provide advice, references and comments. Please, if you are so compelled, contact me to offer your insight, input and comments. Thanks.
So why does this matter? Well, given the current events of our time and decisions our Government has made recently and are contemplating , the benefits of profitable economic performance are not limited to business . . . but also apply to a society's citizens and government. Consider the below benefits with respect to each stakeholder; citizens, businesses and governments.
The Benefits of Profitable Economic Performance
1. Ability to fund growth
2. Ability to invest in capital improvements
3. Ability to invest in research, development and innovation
4. Pay down and eliminate debt
5. Performance incentives and rewards to attract and retain key talent
6. Acquisition opportunities
7. Contribute to social causes
8. Sustain market relevance and market value
9. Rewards and incentives for shareholders
Below you will find examples or click here to download the Excel file.
Below is a draft for a Business Tax Increase:
Below is a draft for a Citizen Tax Decrease:
3 Tips for WorkingPoint's Pricing Page
My interest and passion around pricing stems from my experience in all areas of a business. Over the years I have worked directly with (as well as evaluated and implemented) a number of accounting, ERP and CRM software solutions. Including Oracle, SAP, Great Plains (prior to Microsoft acquisition), QuickBooks, ForeFront and numerous others, as well as third party or custom add-ons that address un-met business needs.
In fact, I have been “this close” to taking the leap and developing my own solution, because I believe all of the available solutions are missing significant opportunities to really set themselves apart from and lead the field.
Below I offer three brief comments on a solution previously launched as NetBooks and recently rebranded and relaunched as WorkingPoint. I went ahead and signed up for the free offering to give it a test drive. So far, for what they are offering, I really like what they have done with their solution. I think WorkingPoint has built a great foundation to position themselves to win a lot of paying customers.
It will be interesting to see how aggressively WorkingPoint goes after the market with compelling and beneficial new features. If they choose to go slow, I wonder if they'd consider offering a white label version so I can add the beneficial features that my first hand experience tells me would compel tens to hundreds of thousands (if not millions) of prospects to switch from what they are using today.
Here are three brief thoughts on their pricing page:
a) Even though they are an accounting package and cents do matter, they should lose the “.00” after their displayed prices. Psychologically the extra digits can seem more expensive and complex. On the flip-side, losing the “.00” can make the pricing seem less, simple and straightforward.
b) I think they should be more creative and add some enthusiasm around how they are naming the different offering options. Sure, it seems irrelevant, but there is a real opportunity to differentiate your offerings, your brand and raise the interest level in the minds of prospects. Just don't go overboard and get too "off the wall" . . . it should make sense to your target customers.
c) The “Coming Soon…” section is an excellent choice and many startups miss opportunities when they do not include a section that captures the direction the solution is going. Doing so communicates value in the mind of prospects and says “we are continually innovating and improving the solution” and “we plan on being around longterm”. I would like to see at least one more upcoming beneficial feature listed though, as two seems like too short of a list. They could even include a last entry that says something like, “Even More On the Way . . . we listen to the recommendations of our customers, click here to see some of the amazing additional features we are working on” (they do include similar copy, but at very bottom of page currently).
Click for larger view, then expand window
I’ll stop there for now, as there are a number of other elements I would be A/B testing. I will update this post with some additional thoughts soon.
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Chris Hopf
Today I received an email (screenshot below) announcing that WorkingPoint has updated their Pricing Page. Perhaps my prior post was taken into consideration.
I sure hope they are AB testing and closely monitoring these changes. Looks like they took some of my tips to heart, but I was surprised to see they decided to reduce their offerings from four down to only two. I rarely make exceptions to my recommendation of 3 offerings minimum, which in their case would be 1 free offering plus 2 paid offerings.
As always, what matters is what performs best. It will be interesting to watch how this evolves.
View the updated pricing page here: http://www.workingpoint.com/pricing-and-signup/
Email Screenshot:
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Updated Pricing Page top half:
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Updated Pricing Page bottom half:
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Chris Hopf
Another iteration of Workingpoint's pricing page is captured below. They have had some slight modifications since my prior update post, but those were primarily around moving "coming soon" features up within the available features.
Notice they have swapped the Premium and the Free columns, as well as their own version of de-emphasizing the Free offering.
Click for larger view, maximize window
