How to price Software? (examples of comapnies)

Clearly, you cannot price your software for less than it costs you to
produce, and sell, each unit. These are your marginal costs. You might
think these costs are zero, but they are not.
You need to find potential customers and persuade them to buy.
If you have a sales team then you’ll need to pay them commission.
It will cost you money to support customers, and chase the customers
who don’t pay.
If you’re relying on an intensive sales model, with face to face meetings,
then your cost of sales will, of course, be higher than if you have a lowtouch,
web sales model. But you need to count the costs in both cases.
If you’re planning on not charging the majority of your users, then
think very carefully about the cost of each additional user. If you think
it is zero then you are almost certainly wrong. If you’re running a web
site, then each additional user will cost you storage space, CPU cycles
and bandwidth. This might be a very low cost – fractions of a penny,
even – but if you need huge numbers of users to make money then
small costs multiplied by vast numbers can equal big outlays.

Take YouTube. It’s a free service and, theoretically, supported by
advertising. The cost of serving each additional video is tiny (about
one tenth of a cent), but in 2009 it will serve up an estimated 75 billion
video streams. Multiply together the tiny cost and the large volume and
you can see understand why YouTube costs Google an estimated $710
million a year to run. It nowhere near covers its costs through
advertising revenue.

When Panasonic launched the 3DO, its gaming console, in 1994, Time
Magazine nominated it its product of the year. With a 32-bit RISC
processor, custom math co-processor and 2MB of RAM, it was far ahead
of its time. But Panasonic priced it at $699, way above its competition
and much higher than what even its target market of early adopters
could bear to pay. That, combined with muddled marketing, caused it
to bomb.
Other games console manufacturers learned from this mistake. When
the PS3 and Xbox 360 were launched, they cost more to produce than
the selling price that the market could bear, so Sony and Microsoft
charged consumers a low price, and accepted that they would lose
money (up to $300) on each console sold. They then recovered the
revenue through royalties on games people bought. The real price of
the console is hidden; buried in a clever pricing model.

With the Wii, Nintendo took a different approach. They wanted to
reach a much wider market than their competitors’ 18 – 35 year old
male sweet spot, but realized that older people, housewives and families
would pay less for a console than hardcore gamers would. So they cut
their cost of manufacture and used cheaper, slower components. When
the Wii was launched in September 2006, Nintendo made a profit on
every console sold. That made the games cheaper to produce too, since
royalty payments can be lower, but not necessarily cheaper to buy.

Why the Adobe Flash Platform?

The Adobe Flash Platform (see Figure 2) includes the following products and technologies:







* Adobe Flash Player is available on 99% of PCs and forms the core client-side runtime of the Adobe Flash Platform.
* The open-source Flex framework provides abstractions to connect to disparate data services via HTTP, SOAP, or AMF. The Flex framework uses an easy to learn declarative language called MXML for developing user interfaces.
* Adobe Flash Builder is an Eclipse-based IDE. It provides robust code editing, navigation, interactive debugging, and a WYSIWYG design surface to accelerate application development.
* Adobe Creative Suite tools, such as Flash Catalyst, enables designers to collaborate with developers to create engaging user experiences.
* Adobe LiveCycle Data Services simplifies data management tasks such as tracking changes, synchronization, paging, and conflict resolution.

100 ways to increase your software sales in 2009

Increase targeted traffic to your website:

1. SEO your website.
2. Write a blog or newsletter of interest to the sort of people who might buy your software.
3. Get more links to your website.
4. Try Google Adwords Pay Per Click (PPC) ads.
5. Write a guest post on someone else’s blog.
6. Try CNet Pay Per Download ads.
7. Promote your software through download sites using the ASP PAD repository, a paid submission tool or free submission tool.
8. Promote your software through platform sites e.g. Apple downloads or Office online.
9. Start an affiliate program.
10. Try Microsoft Adcentre PPC ads.
11. Bid higher for your PPC phrases.
12. Advertise on stumbleupon.
13. Write additional content for your site.
14. Give away a ‘lite’ version of your software.
15. Offer discount coupons.
16. Add a forum to your website.
17. Offer free review copies of your software to bloggers.
18. Do a press release.
19. Run a competition.
20. Write better ads for your PPC campaign.
21. Direct (snail) mail.
22. Run ads in print magazines.
23. Include your URL when posting on relevant forums.
24. Try Yahoo Search Marketing PPC ads.
25. Buy banner ads on targeted blogs, forums and other websites.
26. Add extra keywords to your PPC campaigns.
27. Talk about your software on a podcast.
28. Add a viral element to your software.
29. Do a publicity stunt.
30. Get word of mouth recommendations by giving great support.
31. Get listed in online directories such as DMOZ.
32. Post a screencast on YouTube.

Increase your visitor->download rate:

1. Have an online demo movie.
2. Offer a free trial.
3. Offer a money back guarantee.
4. Port your software to additional platforms e.g. iPhone.
5. Have a clean and professional website.
6. Add case studies to your website.
7. Make sure your website functions with all the major browsers.
8. Get someone else to proof read the copy on your website.
9. Talk to visitors in a language they understand i.e. not technical jargon, unless they are techies.
10. Reduce the number of barriers to downloading the trial (don’t require an email address).
11. Add a product FAQ to your website.
12. Show your price prominently.
13. Improve the usability of your website.
14. Include your contact details on the website.
15. Make sure the people can understand what your software does within 2 seconds of arriving at your site.
16. Make the ‘download’ button more prominent on your website.
17. Fix any errors in your website.
18. Include screenshots on your home page.
19. Add a list of famous customers to your website.
20. Use a digital certificate for your installer and executable.
21. Add (genuine!) testimonials to your website.
22. Create better landing pages for your PPC campaigns.
23. Add a privacy policy to your website.
24. Add live online support to your website.
25. Check your web logs/analytics to find out why/where visitors are leaving your website.

Increase your download->sale rate:

1. Offer more than one payment processor.
2. Improve the usability of your software.
3. Accept purchase orders.
4. Offer Trialpay as an alternative payment method.
5. Offer sensible prices in additional currencies.
6. Require an email address to download your software and follow-up with marketing emails.
7. Increase or reduce the price of your software.
8. Fix bugs in your software.
9. Lengthen or shorten the trial period.
10. Offer bulk purchase discounts.
11. Improve your installer.
12. Make the ‘buy’ button more prominent on your website.
13. Make your software more beautiful.
14. Allow users to buy your product easily from within the software itself.
15. Localize your software into another language.
16. Offer organizational licences.
17. Try limiting your trial by features instead of time (or vice versa).
18. Improve the speed/memory performance of your software.
19. Improve your product documentation.
20. Offer alternative payment models (e.g. an annual subscription instead of a one-off fee).
21. Offer alternative licensing models (e.g. per site instead of per user).
22. Write an introductory tutorial.
23. Reduce the number of clicks and key presses required to make a sale.
24. Add that new feature that people keep asking for.


Increase the value of each sale:

1. Increase the price of your software.
2. Charge extra for optional modules.
3. Upsell additional products and services of your own or as an affiliate.
4. Charge for major upgrades.
5. Offer multiple versions at different price points e.g. standard/business/enterprise.
6. Offer an optional CD.
7. Charge an annual maintenance fee.
8. Charge for support.
9. Offer a premium support plan.

Explore alternative sales channels:

1. Sell through resellers.
2. Exhibit at tradeshows.
3. Cold call prospects.
4. Allow other companies to sell white label versions of your software.
5. Include your software on cover-mounted magazine CDs.
6. Sell through retail stores.
7. Sell on Ebay.
8. Sell on Amazon.
9. Promote your software on one day sale sites, such as BitsDuJour or GiveAwayOfTheDay.
10. Create a new product.

Notes:

* Items are in no particular order in each category.
* Some of the items are mutually exclusive.
* I have tried about 80% of the above. Some worked, some didn’t. In fact, many of them were a total waste of time and money. But the ones that didn’t work for me might work great in a different market (and vice versa). I discuss my experiences with some of them in more detail here: Promoting your software part1, part2, part3, part4, part5, part6.
* This is by no means an exhaustive list. Feel free to suggest more in the comments.
* Don’t know where to start? Perhaps you need a fresh pair of eyes.

Thanks to Stuart Prestedge of Softalk for suggesting some of the above.